Green Energy Success Story

May/27/2009 18:17PM
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Through the Department of Energy, we taxpayers have made billions of dollars in green energy investment. Through the ethanol subsidy we have paid billions in support to ethanol producers so they could produce a net energy loss product and raise food prices. The Stimulus Bill adds $50 billion a year to the EPA to kick start green energy. Biggest idea from Dr. Chu, make all of us buy a white roof for our house. Big idea for only $50 billion, eh?

So far, none of the huge expenditures have brought about any telling results. I have been looking high and low for a green energy success story, and it appeared this week in the Chicago Tribune.

I was shocked that, Illinois, a state that produced a governor who is serving prison time, another who will be soon, and a U.S. senator who was wiretapped buying his seat from the one and only Rod Blagojevich, could have any success story. After all, Archer-Daniels-Midland is headquartered in Illinois. They have parlayed ethanol into their primary business. They did it by buying votes to support ethanol.

This success story is small by Washington standards. Only $217 million and counting. But, the results will be remarkable. They will turn human waste into fertilizer pellets. Touted as a green project, the “black box” has not cost the city a dime, as yet.

It’s a typical green project. More than 5 years behind schedule. And, $15 million over budget. More interestingly, the city has found better and cheper ways to dispose of human waste in the 10 plus years the project has been in planning, approval, and construction.

So why is it a success, you ask? There is a contract provision that requires the facility to pass certain tests. If the tests are failed, the City of Chicago can just walk away and stick the investors and the village of Hodgkins with this $217 million loser. That would probably bankrupt the village. Probably the company too. Someone was smart enough to think this might be a product built by lobbyists for lobbyists and political gain. So, they put the escape clause in the contract.

Maybe the company and the village have enough skin in the game to make it work and pass the four tests to begin in June. But, it is late and over budget, so the city may luck out on this one. It would only break a company and a village. It takes a bridge to build a village, not a bad green project.

But, if it passes the tests, the city will have to run it for 5 years even if it isn’t cost effective. Then they can walk away for only a paltry $188 million.

Spinning human manure into gold has proven harder than everyone thought. But, this project will stand alone. You can rest assured all the billions the DOE and the EPA will spend on projects that will be behind time, over budget, and not cost effective will not have escape clauses. So, let’s give credit where credit is due.

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