Fisker Cries Foul Over Romney's Attacks on Bush/Obama Green Energy Program
October 4, 2012 7:13 PM
(Source: NJ Today)
Fact checkers call some of Romney's "green jobs" claims into question
Electric sports car maker Fisker Automotive
found itself in the cross-hairs
of former Governor and current Republican Presidential nominee Mitt Romney in the first of several televised debates with Democratic President Barack Obama. During the debate, Romney
, "But don't forget, you put $90 billion, like 50 years' worth of breaks, into -- into solar and wind, to Solyndra and Fisker and Tester and Ener1. I mean, I had a friend who said you don't just pick the winners and losers, you pick the losers, all right?"
I. Fisker, Tesla Fire Back on "Loser" Claims
That quote drew the ire of Fisker, which on Thursday issued
a press release
commenting, "We don't consider ourselves a loser."
Fisker argues that while it did win a
$528.7M USD loan
from the federal government under the
U.S. Department of Energy
Advanced Technologies Vehicle Manufacturing Loan Program
(ATVM) -- a component of the anti-recessionary "bailout" of 2008-2009 -- that it raised over twice that ($1.2B USD) in private equity.
And while it was two years late in delivering its first vehicle, the Karma, it points to
sales of 1,500 Karmas
as a sign of success. The company also says that it created 1,000 jobs.
That would mean that for $528,000 the government
Fisker in interest-free , one job (based on its claims) was created. That may not seem great, but remember that the big issue is that the money was a loan. In other words, if Fisker succeeds the government will have created jobs "for free" (in the sense that it will get its money back, plus a small amount of interest to keep up with inflation) -- other than cost of whatever could have been created by spending the money elsewhere. But if Fisker fails taxpayers could be left out in the cold.
Fisker is technically correct -- it's not a loser in that it's still in business and is producing product and has a shot at repaying its debt. That's not say Mitt Romney won't be right in the long run, though. Fisker may yet prove to be a loser.
Tesla, whose Model S is pictured, is racing to repay its gov't loan. [Source: Tesla Motors]
Tesla Motors Comp. (
received a $465M USD loan
as part of the green energy program, also seemed fired up about Mitt Romney's comment, though it didn't directly address them. Instead it posted a blog, writing that it would be looking to start repaying its loan immediately, following the
progress with its Model S entry-level luxury electric vehicle
. Its CEO -- tech visionary Elon Musk --
The DOE has simply asked if we would be willing to repay the loan early if we have excess cash. The answer is unequivocally yes and I am happy to announce that we will be initiating an advance payment today to prefund the principal payment that is due in March 2013. The purpose of the DOE Advanced Technology Manufacturing Program was to serve as a catalyst for accelerating sustainable transport technology, which is in the best interests of all Americans and ultimately people throughout the world. In the case of Tesla, the result has been a resurgence in American manufacturing ability and the creation of over 3500 high quality jobs. Nonetheless, we have a duty at Tesla, having accepted this loan as a portion of our capital, to repay it at the earliest opportunity. We will do exactly that.
Tesla, in comparison to Fisker, has been much more successful, meeting most of its ambitious deadlines. While it has yet to repay its loan, the $132.3K USD/job rate is more competitive that Fisker and Tesla is on the verge of beginning to pay the government back. Thus it seems far less likely that Tesla will prove a "loser" as claimed.
II. President Bush Signed $25B USD in Green Vehicle Loans Into Law
But a more interesting point is who is to blame if Fisker or Tesla
happen to lose. Certainly Congress would be to blame. And it's not just Democrats -- the loan program was first installed by the 110th Congress as a provision in the
Energy Independence and Security Act of 2007
. Republicans were roughly divided in half
on that vote
, with 19 Senate Republicans voting in favor of the "green jobs" funding and 23 voting against it.
Among the Republican backers of the funding was Republican
Sen. Larry Craig
(R-ID). Sen. Craig proved pivotal in the Senate debate and in later green energy debates, arguing that by voting for green energy funding the U.S. "won't let the the Venezuelas, or the Nigerias, or the Saudi Arabias, or the Irans, jerk us around by the 'gas nozzle' the way they are doing it now."
And the loan program was
originally signed into law in Dec. 2007
, with funding signed into law in the Fall of 2008 by President George W. Bush. So while President Obama was indeed in office in Sept. 2009 when Fisker received its loan, the loan would never have been possible without deep commitment from
members of the Republican party.
Of course, President Obama does deserve part of the credit/blame, as he continued to support and sign into law as part of the federal budget funding for the program that both parties passed into law under President George W. Bush. And the President did install certain DOE officials that were responsible for reviewing and granting the loans.
III. Mitt Romney's Math Fail: "About Half" is Actually 1 Percent
Fact checkers at
The Washington Post
at Romney comments. Mr. Romney claimed, "And in one year, you [Obama] provided $90 billion in breaks to the green energy world."
But again, at least $25B USD of that (ATVM) dates back to President George W. Bush and strong support from Republicans in the U.S. Senate.
But what about Mitt Romney's claim "You put $90 billion into -- into green jobs. And I -- look, I'm all in favor of green energy. $90 billion, that would have -- that would have hired 2 million teachers. $90 billion. And these businesses, many of them have gone out of business, I think about half of them, of the ones have been invested in have gone out of business."
Well that's only true if you consider 1 percent "about half" according to
The Washington Post
stoked outrage from the Republican base -- particularly when
donations to the President by Solyndra's managers
came to light -- most of the companies, universities, and projects that received loans are still alive and well, the paper says.
Romney won the debate, but failed at math, according to fact checkers.
[Image Source: Iowa Republican]
When Congress proposed the loan program, it (including the Republican backers)
some of the companies who received loans to fail. In fact, what was surprising, when
The Washington Post
looked at the actual numbers, is that the failures will actually likely cost the government less than the $2.47B USD set aside by Congress to cover losses from the few loans out of the $90B USD that went unpaid.
In other words, not only are 99 percent of the programs still on the route to repayment, the net loss on the green energy programs is less that expected.
And while clearly a biased source,
green venture capital firm DBL
put forth a compelling report last year that mapped hard numbers and historical facts on energy expenditures. It found that since the 1700s U.S. Presidents had provided support to the fossil fuel industry, and in the mid-1900s they threw their financial weight behind nuclear power.
Pennsylvania (and later West Virginia) coal were protected from price gouging by foreign rivals by tariffs on coal imports. During the oil boom the federal government provided loans, grants, land, and other incentives estimated to be worth $1.8B USD per year in today's dollars. Nuclear power in the 1950s received $3.3B USD per year by today's standards.
The report describes government investment in alternative energy as "temporary" and "erratic" complaining that even with the $21B USD, President Obama's DOE did push to fund solar, wind, geothermal, and natural gas projects, alternative energy still has received less that nuclear or fossil fuels.
IV. The Green Power Debate Rolls On
When it comes to the historically low funding of alternative energy, some would say "good" as it's inarguably more expensive at current deployment costs and less reliable in the sense that the wind isn't always blowing and the sun isn't always shining on demand.
[Image Source: Ames Power]
But the facts reveal a number of things:
Republicans have proved key backers of green energy -- particularly Republican President George W. Bush
99 percent of loan recipients have stayed in business.
Green energy has received less money than nuclear or fossil fuels did historically.
To Mitt Romney's credit, 67 percent of Americans thought he won the debate in a
, compared to only 25 percent for Obama. But the fact remains he was definitely off base in many of his claims about the government's green energy efforts and was on shaky footing when he gave President Obama the blame -- or the credit -- for all of the green energy efforts, when many of those efforts were installed by his own Republican colleagues.
Tesla Motors Comp.
Fisker via InsideLine
The Washington Post
CNN [debate transcript]
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