Thursday, September 20, 2012

ENERGY USE STYMIES CORPORATE INTEREST?

Fabulous, this New York Times, lead story, headline, Tax Credit in Doubt, Wind Power Industry Is Withering, By DIANE CARDWELL makes clear financial loyalty still calls the shots in the Great Power Game.
Imagine when automobiles and buses, through government subsidy, displaced localized train travel, if train barons manipulated costs to retain their market share? But by then the barons had been riddled with efforts to undermine them for decades, so they were weakened when the automobile onslaught came. Where as now the lesson learned remains, money can dictate how much farther we’re due to fall behind the earth’s clock. Oo-oo, that cliché, global warming. Is it true, from dedicated scientists to thoroughly encroached business interests, it’s a contrivance to pay for research? What God damned difference is global warming when a mess has been made, regardless?
So, what does The Times have to report? — Last month, Gamesa, a major maker of components for wind turbines, completed the first significant order of its latest invention: a camper-size box that can capture the energy of slow winds, potentially opening up new parts of the country to wind power.
Geez, if only the story ended there – But by the time the last of the devices, worth more than $1.25 million, was hitched to a rail car, Gamesa had all but shut down its factory and furloughed 92 workers. “We are all really sad,” said Miguel Orobiyi, 34, who worked as a mechanical assembler at the Gamesa plant for nearly five years. “I hope they call us back because they are really, really good jobs.”
The Times cites – Similar cutbacks are happening throughout the American wind sector, which includes hundreds of manufacturers, from multinationals that make giant windmills to smaller local manufacturers that supply specialty steel or bolts. In recent months, companies have announced almost 1,700 layoffs.
At its peak in 2008 and 2009, the industry employed about 85,000 people, according to the industry’s principal trade group, American Wind Energy Association. Many of those jobs have disappeared since, as wind companies have been buffeted by weak demand for electricity, stiff competition from cheap natural gas and cheaper options from Asian competitors.
Which means what class? Soon prices rise again. And why isn’t wind and solar better financed? If I investigated would I find the influence of major stockholders from other energy sources? Of course, that’s diversification in the marketplace and the only proven method for survival. Question is, since this isn’t the past when we didn’t know better, how can consciences let the right way whither for a few dollars more?
So then the real question is, are energy companies bright enough to evolve?
The Times prints – Chinese manufacturers, who can often underprice goods because of generous state subsidies, have moved into the American market and have become an issue in the larger trade tensions between the two countries. In July, the United States Commerce Department imposed tariffs on steel turbine towers from China after finding that manufacturers had been selling them for less than the cost of production.
Makes you want to throw up, doesn’t it, how the bottom line is ignored for other financial satisfactions. Huh?
And now, according to The Times – on top of the business challenges, the industry is facing a big political problem in Washington: the Dec. 31 expiration of a federal tax credit that makes wind power more competitive with other sources of electricity.
If only the business fell apart earlier and the president could have done the right thing and baled out this industry too. No one has to actually say, or admit, it’s not politically prudent to face this issue at this time.
So, The Times can call it – The tax break, which costs about $1 billion a year, has been periodically renewed by Congress with support from both parties. This year, however, it has become a wedge issue in the presidential contest. President Obama has traveled to wind-heavy swing states like Iowa to tout his support for the subsidy. Mitt Romney, the Republican nominee, has said he opposes the wind credit, and that has galvanized Republicans in Congress against it, perhaps dooming any extension or at least delaying it until after the election despite a last-ditch lobbying effort from proponents this week.
Right, and five years hence everyone can claim to be involved saving the wind industry. But for now, not valuable enough.
The Times does point out – Opponents argue that the industry has had long enough to wean itself from the subsidy and, with wind representing a small percentage of total electricity generation, the taxpayers’ investment has yielded an insufficient return.
Well that should demonstrate to The Wall Street Journal that The Times isn’t a mouthpiece for the loser tree huggers. But one day, the tree huggers will have been proven absolutely right. Then what will the future make of the legacy of all the world’s major publications? Not just these two prominent ones.
But big voices pound points home.
Benjamin Cole, a spokesman for the American Energy Alliance, a group partly financed by oil interests lobbying against the credit in Washington, said, “Big Wind has had extension after extension after extension. The government shouldn’t be continuing to prop up industries that never seem to be able to get off their training wheels.”
Damn that corporate welfare, right Ben?
But without the tax credit in place, the wind business “falls off a cliff,” said Ryan Wiser, a staff scientist at Lawrence Berkeley National Laboratory who studies the market potential of renewable electricity sources.
Staff scientist studying market potential? Is anyone hearing themselves? Does anyone really know what they’re studying energy for? Money, right. Stop pretending this is about market forces. This is about instilling some real will in people to go forward. Pure and simple, this energy equation is delivered to us pretending to be mathematical.
So The Times follows this story. – The industry’s precariousness was apparent a few weeks ago at the Gamesa factory, as a crew loaded the guts of the company’s new component, a device known as a nacelle, into its fiberglass shell. Only 50 completed nacelles awaited pickup in a yard once filled with three times as many, most of the production line stood idle, and shelves rated to hold 7,270 pounds of parts and equipment lay bare.
Not because we don’t need this, but because financial people haven’t figured out how they’ll be paid. How did the manipulation of the housing market work out to create more income?
“We’ve done a lot to get really efficient here,” said Tom Bell, the manager of the plant, which was built on the grounds of a shuttered U.S. Steel factory that was once a bedrock of the local economy. “Now we just need a few more orders.”
Industry executives and analysts say that the looming end of the production tax credit, which subsidizes wind power by 2.2 cents a kilowatt-hour, has made project developers skittish about investing or going forward. That reluctance has rippled through the supply chain.
So this means tax credits for oil companies will end entirely? I don’t care, cars are ok, but stop pretending economics is a reason not to improve the world.
On Tuesday, Siemens, the German-based turbine-maker, announced it would lay off 945 workers in Kansas, Iowa and Florida, including part-timers. Last week Katana Summit, a tower manufacturer, said it would shut down operations in Nebraska and Washington if it could not find a buyer. Vestas, the world’s largest turbine manufacturer, with operations in Colorado and Texas, recently laid off 1,400 workers globally on top of 2,300 layoffs announced earlier this year. Clipper Windpower, with manufacturing in Iowa, is reducing its staff by a third, to 376 from 550.DMI Industries, another tower producer, is planning to lay off 167 workers in Tulsa by November.
According to The Times – Aside from Clipper Windpower and General Electric, most of the turbine manufacturers operating in the United States are headquartered overseas, especially in Europe, where wind power took off first, spurred by clean energy policies and generous subsidies. Then – As the United States put in place mandates and subsidies of its own, several large outfits, including the Spanish company Gamesa, set up shop stateside. Because the turbines, made of roughly 8,000 parts, are so large and heavy they are difficult and expensive to transport. Blades half the length of a football field, towers rising hundreds of feet in the air, motors weighing in the tons. As a result, manufacturers invested billions in developing a supply chain in the United States. All told, more than 100 companies contribute parts to Gamesa’s 75-ton devices, which are the most expensive and complex major components of high-tech windmills.
Sounds as if that amounts to tons of money too, just not enough of the right people have figured out how they’ll be paid.
The Times concludes with Rich Miller, who works for Hine in Quakertown, Pa. A longtime Gamesa partner that followed the company from Spain, investing millions in building plants in the United States and sending workers to Spain for expensive training. Mr. Miller said, that when he went to Spain to learn how to build and test power units for its hydraulic systems, it was his first trip out of the country. “That was quite an experience in itself,” said Mr. Miller, who is 58, adding that he probably learned more in four years at Hine than at previous jobs.
Now he worries about having to move on. “Hopefully it will go back to the way things were.” Losing his job at his age, he said, “would be devastating for me.”
Nitpicking financial decisions produce nitpicking results.
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