While we rush headlong into that storm

George Rebane

California has become one of the worst places in the world to start companies and do business.  Onto this reality we have stitched a plan to save the state’s economy through an anticipated flood of new green (pardon me, ‘cleantech’) companies.   The intent is to subsidize them to success under the helm of the California Air Resources Board that is becoming more Orwellian by the day in its regulatory excesses.  All the while we ignore what other countries will do to compete with us, and how other green companies in the US have fared.  Here is a glimpse of Michigan’s green experience.

Built on technologies that are new and evolving, green industries spawn lots of start-ups, but they can shrivel just as quickly. Other countries are also pushing—and subsidizing—these same industries, making it hard for them to take root and expand in costlier locales like the U.S.

"Many places are looking for a miracle, and they think alternative energy plants are going to be a savior," says Daniel Meckstroth, an economist at the Manufacturers Alliance/MAPI, an Arlington, Va., public policy and research group. But the businesses aren't large enough or growing fast enough to create large pools of employment.

More here.

Comments

[Russ Steele]

The Beacon Hills Institute at Suffolk University in Boston has released its 10th annual State Competitiveness Report. The report examines government and fiscal  policies, security, infrastructure, human resources, technology, business incubation, openness, environmental policy.

California finished 29th.  The state finished poorly in the obvious areas of government and fiscal policies, but surprisingly impacted by a slanted survey associated with issues on environmental policy.

Strange, Suffolk University believes that implementation of green policies will have a negative impact on business and consumers.

Yesterday Grass Valley had an economic workshop and looking at the staff report perpared for the meeting, I did not see any focus on going green to revitalize the Grass Valley economy. It could be that the green job myth has run it's course.

More on the Beacon Hills Institute report can be found at NC Media Watch.

[Michael Anderson]

Here are some interesting articles for your perusal. Two are from the NY Times and I reluctantly post them. However, they do provide a counterbalance to the WSJ.

Please focus on Jeff Siegel's article:

http://www.energyandcapital.com/articles/electric-car-patriots/1351

http://www.nytimes.com/2010/12/01/opinion/01friedman.html?_r=1&hp

http://www.nytimes.com/2010/11/29/opinion/29krugman.html?ref=opinion

[Russ Steele]

While the Grass Valley City Staff did not mention green technology as a solution to the local economy, according to a Union article on the meeting members of the public did:

Members of the public at the meeting offered suggestions to help remedy the situation.

Resident Ralph Silberstein warned against quick fixes and suggested sustainable economic engines.

“I'd like to see a branding effort, so shoppers could see if a product is made in Nevada County rather than somewhere else,” said incoming Nevada County Supervisor Terry Lamphier.

He also suggested going after green technology, which is seeing an influx of development in the Sacramento area.

Grass Valley and incoming Nevada County Supervisor Terry Lamphier have an opportunity to lean from other communities that have bought into the green jobs myth and got bitten. But, I have my doubts that they will let go of their dream of green jobs even when reality is right under their noses.

[Dixon Cruickshank]

Trying to develope green tech is just fine, as long the local Gov is not subsidizing them anymore than they would any other type. They can be a an addition but will surely not be the savior that people think. RE and construction has always brought the economy back but with all the new rules for everything from mortgages to sprinklers they just made it harder each time, as it has to start with the first time home buyers.

[George Rebane]

That's an excellent point Dixon. Since the 1930s RE has been the leader in reviving the economy. Tying anchors to the ankles of this industry more and more regulations that boosts the entry prices is beyond stoopid. And we did it again here in Nevada County.

[Michael Anderson]

"RE and construction has always brought the economy back..."

But this recession is different. Real estate and construction will not be the sectors that return first, if ever. And pinning your hopes on those old has-beens will only lengthen and deepen the pain.

Which business sectors will lead the way in Nevada County? I'm putting my money on health care and high tech.

[Mikey McD]

Friedman and Krugman represent just about everything that is wrong with the USA. I feel dirty for reading them. In our home they are referred to as traitors. BTW, there was no connection to George's post in their op/eds.

[D. King]

Perhaps we should embrace new technologies.
We can open up an LER (light emitting resistor)
manufacturing facility. The non landfill polluting
nature of this technology should fit right in, in
Nevada County.

See here a rare look at this new LER technology.

http://image.wistatutor.com/content/feed/tvcs/bulb.GIF

[Account Deleted]

Thanks, Michael for the links to the articles from the NYT.
J Siegel's article misses the point completely. If you want to develop and market a car of any kind on your own (or free-choosing investors) dime, and have the public buy it with their own earnings, then there is no one against you. The electric cars being sold now are just not a good utility value for what they actually cost. They will not do much at all to free us from dependence on imported goods. They might get better and cheaper in the future, but I can't afford one and I don't like having to help some one who makes more money than I do buy one. Friedman knows nothing about China, other than what the Chinese govt wants him to know and Krugman is at it again with his bizarre attitude that we will be fine once we destroy our currency. The first article was a bit connected with George's post, as the left continues to ignore the proven fact that govt directed subsidies for unwanted tech is not going to bring us out of the financial mess we are in. These are the same folks that touted alcohol from corn as saving us having to import oil. How's that working for us now?

[George Rebane]

Why would anyone attempt to build/start a new manufacturing facility in an out-of-the-way corner of California that requires the added transport costs of bringing in raw materials and taking out finished products from and to transportation centers? And we have yet to mention that this little corner makes it at least as hard to start and operate a business as anywhere else in this benighted state. I have not found anyone with an answer to this question. But I have witnessed former NC companies that have answered with their feet.

[Dixon Cruickshank]

Mr Anderson - high tech of what? thats a pretty broad and over used term IMHO - the computer industry is a price driven commodity at this point. Specialty software sure but those markets are small, green tech is even smaller and econmically worthless - the mass market is harder find something everyone NEEDS to have, but they need housing, always have always will. As for Health Care its certainly growing but the Gov will put a stop to that as well with socialised medicine.

We are talking millions upon millions of jobs needed, not hundreds. A guy thats been in construction for 20 or 30 years can't reinvent himself as a software developer because he wants too. RE and construction has always turned things around first by putting trades back to work - Gov/Union road building is not it BTW. Within the last 20 yrs both recessions were turned around by it and the early 90's was different and brutal as well, but it happened then too.

The mortgage business is a government induced basket case, thats the biggest problem in bringing construction back and I don't have an answer - they screwed it up and now want to regulate it to death, which they have. Think for a second all the professions that feed off it - RE agents- mortgage brokers-Title people- lawyers - furniture- surveyors - builders - A/C - pools and a gazillion trades - thats why it always works. It puts more money in the economy faster than anything else period, always has always will.

[Russ Steele]

Warren Meyer at the Climate Skeptics has some thoughts on the Leaf Milage claims in: Apples and oranges comparison of electricity and gasoline.

To understand the problem, look at the methodology:
So, how does the EPA calculate mpg for an electric car? Nissan’s presser says the EPA uses a formula where 33.7 kWhs are equivalent to one gallon of gasoline energy

To get 33.7 kWhs to one gallon, they have basically done a conversion through BTUs — ie 1 KWh = 3412 BTU and one gallon of gasoline releases 115,000 BTU of energy in combustion.

Am I the only one that sees the problem?  They are comparing apples and oranges.  The gasoline number is a potential energy number — which given inefficiencies (not to mention the second law of thermodynamics) we can never fully capture as useful work out of the fuel.  They are measuring the potential energy in the gasoline before we start to try to convert it to a useful form.  However, with electricity, they are measuring the energy after we have already done much of this conversion and suffered most of the losses.

They are therefore giving the electric vehicle a huge break.  When we measure mpg on a traditional car, the efficiency takes a hit due to conversion efficiencies and heat losses in combustion.  The same thing happens when we generate electricity, but the electric car in this measurement is not being saddled with these losses while the traditional car does have to bear these costs.  Measuring how efficient the Leaf is at using electricity from an electric outlet is roughly equivalent to measuring how efficient my car is at using the energy in the drive shaft.

An apples to apples comparison would compare the traditional car’s MPG with the Leaf’s miles per gallon of gasoline (or gasoline equivalent) that would have to be burned to generate the electricity it uses.  Even if a power plant were operating at 50% efficiency (which I think is actually high and ignores transmission losses) this reduces the Leaf’s MPG down to 50, which is good but in line with several very efficient traditional cars.

[Dixon Cruickshank]

Russ as a follow up question on this - first a better analogy for the gas would be a comparision at the pump before the car is started.

question - how much does it cost to charge one these things? I know they need a special charger and stuff but I'm not sure how long it takes either. With the little motors they have they should get at least 40mpg which is $3 to go 40 miles. The cost of the electric charge would have to include the before and after I would think too - just wonder'in

[Todd Juvinall]

All wealth begins from the earth. Mining, ag, timber, fish, etc. High tec requires components made from mined materials. Try to open a mine in California. Try to farm with no water. When the eco nuts and regulators get done, millions of people will be in ques for a loaf of bread and a gallon of milk in the urban areas. Oh, that was the communist countries wasn't t? Anyway, the wrong people have been in charge for to long here and I along with many others I will be working hard to fix that.

[Russ Steele]

Dixon,

The Green Auto Blog too the Chevy Volt for a ride in California and here are the results.

During its time with us, our 2011 Chevy Volt tester consumed energy at the rate of 39.0 kilowatt-hours per 100 miles when in electric-only mode and averaged 31.1 mpg in gas engine assistance mode. We paid an average of $0.31 per kilowatt-hour of electricity and $3.31 per gallon of 91 octane swill, so the magic of arithmetic tells us that each one of the Volt's miles driven on electricity cost us more money than if it'd simply consumed gasoline instead. That's due in part to our high electricity rate - had our rate dropped to $0.24 per kilowatt-hour, we'd have reached parity on a cost-per-mile basis between electrons and dinosaurs.

[Russ Steele]

From a post on Red State

Americans bought the Obama administration's snake oil promise of green jobs and invested thousands of dollars of their own money only to realize it was all a dead end:
[Laurence] Anton has been out of work since 2008, when his job as a surveyor vanished with Florida's once-sizzling housing market. After a futile search, at age 56 he reluctantly returned to school to learn the kind of job skills the Obama administration is wagering will soon fuel an employment boom: solar installation, sustainable landscape design, recycling and green demolition.
Anton said the classes, funded with a $2.9 million federal grant to Ocala's workforce development organization, have taught him a lot. He's learned how to apply Ohm's law, how to solder tiny components on circuit boards and how to disassemble rather than demolish a building.
The only problem is that his new skills have not resulted in a single job offer. Officials who run Ocala's green jobs training program say the same is true for three-quarters of their first 100 graduates.
"I think I have put in 200 applications," said Anton, who exhausted his unemployment benefits months ago and now relies on food stamps and his dwindling savings to survive. "I'm long past the point where I need some regular income."
The Obama administration poured more than $90 billion of the $800 billion stimulus into clean energy programs only to watch unemployment steadily increase. The White House stubbornly claims that the green initiatives have "saved or created" over 200,000 jobs, but even the Washington Post calls that number a "pittance" compared to the millions of jobs that have evaporated since 2007.

[Dixon Cruickshank]

thats what I thought Russ, actually the 31mpg is kinda weak and they put 91 Oct in it - 87 would have worked even better, If something other than gas would work better we would have been using it long ago.

[RL Crabb]

So the Chevy Volt sells for $41K, costs $40K to make, and if you buy one, the govmint gives you $7500 tax break. Sounds like GM is only surviving on life support, and hoping no one pulls the plug.

[Michael Anderson]

Dixon asked: "Mr Anderson - high tech of what?"

I'm speaking specifically about Nevada County, i.e. Video Valley. The high-tech spin-offs from the Grass Valley Group continue to perform well during this current recession and more businesses like those would help a lot toward maturing our local business foundation. These are not primarily manufacturing jobs, they mostly do R&D and design work with some final assembly and testing.

I suspect that construction and real estate will do better in Nevada County than in other places, if only because our inventory never got so out of whack like it did in places like Las Vegas and Tracy. But it will not drive the Nevada County economy out of the current recession.

[Mikey McD]

Here is how the US Government 'invests'- it's no wonder we are broke.

"WASHINGTON (AP) -- The Treasury Department says it has received another $1.8 billion in net proceeds from the sale of additional stock in General Motors.

Treasury said the revenue received Thursday brought the total amount the government has earned from an initial public offering of General Motors stock to $13.5 billion.

Treasury had said last week it had expected to earn another $1.8 billion.

HERE'S THE KICKER, the US government put $49.5 billion into GM as part of its bailout.

OUCH! Invest $49.5 Billion and smile when they get $15.3 billion back- loss of $34.2 Billion.

[kim pruett]

Hi George,

I have been doing a lot of research on bio-fuels and bio-mass type projects and in every case so far that I have seen the math does not pencil out. The only way for these projects to pencil out is if they are subsidized. Yes, there are several benefits with bio-mass power, it is cheaper than solar and wind, it helps clean up the forest and helps with wildfire issues, it puts loggers to work. The concern that I have is being able to keep these bio-mass plants going after they are up and going.

[Michael Anderson]

Kim,

It would be interesting to know at what point the price per gallon for bio-fuels becomes sustainable. The price of oil will continue to rise in the coming decades, so that point of sustainability is a target. Also, current fossil fuel extraction is heavily subsidized and needs to enter the calculation.

Michael A.

[Mikey McD]

There's always the Nissan Leaf?

http://www.nissanusa.com/leaf-electric-car/tags/show/range#/leaf-electric-car/tags/show/all-videos