Also, didn't the recent SotU address include a reference to Ener1 as a success of the green energy program supported by the administration? I thought I read that somewhere.

Archduke Russell John wrote:Also, didn't the recent SotU address include a reference to Ener1 as a success of the green energy program supported by the administration? I thought I read that somewhere.

Not by name, but yes. So, some are trying to make this a bipartisan disaster. After all, Mitch Daniels and Dick Lugar both supported the notion of propping up Ener1.

Whatever. Only one candidate for President has said we need to put MORE money into these fiascoes while suppressing oil production domestically. He says he favors "all of the above," yet has consistently suppressed production of oil and coal.

In the Gulf of Mexico, it looks like a UN meeting is breaking out:

A massive $750m (£473m) Chinese-built oil rig, the Scarabeo 9, is due to arrive in Cuba before the end of the year, to begin drilling a series of exploratory wells.

A whole range of international oil companies from Spain, Norway, Russia, India, Vietnam, Malaysia, Canada, Angola, Venezuela, and China - but not the US - are lining up to hire the rig and search for what are believed to be substantial oil deposits.

"We will drill several wells next year and I'm sure we will have discoveries. It is not a matter of if we have oil, it is a matter of when we are going to start producing," Rafael Tenreiro, head of exploration for the Cuban state-owned oil company Cupet, confidently predicts.

The Spanish company Repsol will be the first to drill, with an exploratory well in extremely deep water just 50 miles (80km) off the coast of Florida.
Be prepared

It has sent alarm bells ringing in the United States because if there were an accident, the ocean currents would push any oil spill onto Florida's beaches and the Everglades.

Yet under the US trade embargo, neither American firms nor the Coast Guard could come to Cuba's assistance or provide much needed equipment such as booms, pumps, skimmers and oil dispersant systems.

The Cubans would need to turn to the Norwegians, British or Brazilians for help.

Smart policy? Good economics? Good leadership?

No. No. No.

That's our President!

steve

Since you don't know . . . you can fantasize. Liberals like to do that.
And, here's something you don't understand: what Romney proposed was legal. What Obama did was not. Have a nice day

I admit I don't know how Ener1's retrenchment will pan out. I don't have the ability to accurately predict the future 100%, which is why I couched my comment in an interagatory.Apparently you feel you are 100% presecient. Despite evidence on these discussion boards that you are not.
Many, many companies engage in the restructuring that Ener1 is engaged in, and come out of the restructuring poised to grow and succeed.Its a shining example of the ability of free enterprise to react to market conditions and reset a correct course.
Ener1 wouldn't be the first company to over estimate the growth of their market, but then retrench, resize and suceed within the scope of the market. Or when the market did start to grow, were in a position to grow. The early history of the automotive market is rife with examples. Hewlitt Packard provides an example of this as well.
You have to stop confusing govnerment invovlement in the subsidization of an industry sectors; early development with "Marxism". Like any investment, it can succeed or fail. But its goals are somewhat different then an individual investor. It isn't usually made with the short term goal of immediate profit, its made with the long term goal of helping establish a new industrial sector.
In this case, advanced battery production.
Nothing wrong with the idea, as battery development has largely been a part of the mobile phone and computer advancements and will be obviously be an important part of hybrid and electric cars... A sector which will grow substnatially. That is if one beleives the investment stragies of every single automotive manufacturer in the world and not a bitter old oracle from upstate new york.
Is it important for the US to have a healthy share of the automotive battery industry in the US? I think its preferable.and strategically important. Reagan didn't abandon the Us semi-conductor industry when it became vulnerable to foreign competition. He propped it up, as it became clear that it was a strategic necessity. The arguement can be made in this sector as well.
.
As for the legaility of the Auto bail out...we're into the tin hat, conspiracy crowd again,...The courts have dealt with the shareholders and bond holders who protested. Their rulings contradict you.

But I'm not entirely sure what point you are making with your reference to the Cuban oil fields. Surely you don't think a US government can stop Cuba from exploiting its resources do you?
Or are you worried about pollution?

It has sent alarm bells ringing in the United States because if there were an accident, the ocean currents would push any oil spill onto Florida's beaches and the Everglades

.

If so, if you are indeed worried about pollution, then what complaint do you have about the Obama administrations' embargo on oil production that was intended to reset the regulatory regime and regulatory enforcement in order to avoid another BP type spill.
You seem to think that the embargo was intended only to stop oil production....when it was intended to prevent further disastrous oil spills.
Or you engaging in more magical thinking, where prevention of disasters like New Horizon can be accomplished by just wishing it so?

Doctor Fate wrote:In the Gulf of Mexico, it looks like a UN meeting is breaking out:
...

Smart policy? Good economics? Good leadership?

No. No. No.

That's our President!

Sorry, you think Obama is responsible for Cuba's drilling for oil? What is he supposed to do about it, start a war?

By the way, they already are drilling for oil off the north coast of Cuba. Back in 2004 I was able to see the rigs from the beach on Varadero peninsular, and they have been exploring for some time.

I'm not sure of the link you are making. On the one hand, they are exploiting resources you can't even if you were drilling more, because they aren't in US waters. On the other hand, if it ends up with a leak or disaster, the only thing stopping America from helping is the stupid embargo. Given that Obama didn't put that in place (and several previous presidents and Congresses of both parties are in the same boat), I'm not sure that's his fault really.

Man, you really will blame the guy for anything. If you stub your toe is the first thought how you can pin it on Barack?

danivon wrote:

Doctor Fate wrote:In the Gulf of Mexico, it looks like a UN meeting is breaking out:
...

Smart policy? Good economics? Good leadership?

No. No. No.

That's our President!

Sorry, you think Obama is responsible for Cuba's drilling for oil? What is he supposed to do about it, start a war?

...

Man, you really will blame the guy for anything. If you stub your toe is the first thought how you can pin it on Barack?

From my perspective Steve's seething hatred of Obama gets in the way of rational discussion of ideas and policy. This thing on Cuba is a prime example. Most people agree, the US embargo of Cuba is stupid and has been for at least 30 years. But the reason it continues is political and has nothing to do with Obama. Could he get it changed? Maybe, but the amount of political capital that would take would be huge.

I resurrect this, because I read today how important shale gas is to the way energy is being consumed in the US.

The United States has 860 trillion cubic feet of recoverable natural gas, which would give the country 75 years’ worth of gas consumption at current rates. More important, the United States has become the world’s low-cost producer of natural gas. That fact is already changing the future of U.S. manufacturing. Companies such as Dow Chemical and Westlake Chemical are finding that low U.S. energy costs can mitigate the lower cost of labor in Asia — making it economical to keep and even build manufacturing facilities in the United States.

remarkable. But here's what's interesting.... the US government had key direct involvement in the development of this industry:

thanks to the efforts of a small private company, Mitchell Energy, combined with a horizontal drilling procedure called hydraulic fracking, it has become possible to extract vast quantities of natural gas from shale, which this country has in abundance.
As with so many stories of American ingenuity, Mitchell Energy had a little help. In the 1970s, the federal government initiated the Eastern Gas Shales Project and funded dozens of hydro-fracking demonstration projects. The Energy Department pioneered a technique known as massive hydraulic fracturing, a key step along the way. It subsidized Mitchell Energy’s first successful horizontal drilling in the North Texas Barnett Shale region in 1991. Between 1978 and 1992, the federal government spent $137 million to develop these technologies

.

Hmm... So direct government funding in the 70's 80's and 90's has help build a new domestic energy source... Could one call that a repudiation of the idea that the US government cannot successfully help the development of key industries? They picked a winner here. Mitchell Energy. And by doing so they paved the way for natural gas to help reboot the American economy....

source: http://www.washingtonpost.com/shale-gas ... ml?hpid=z2

The problem though ricky is that Liberals are doing everything they can to stop hydraulic fracking from being used. I think I read recently (I could be wrong about this) that NY recently passed a bill that made it illegal to use fracking in the state. Here in PA with the large Marcellus Shale fields, Democrats are trying to pass laws that would either make fracking out right illegal or, failing that, place such onerous taxes and/or fees on fracking as to make it unfeasible to do it.

Archduke Russell John wrote:The problem though ricky is that Liberals are doing everything they can to stop hydraulic fracking from being used.

Everything?

Archduke Russell John wrote:I think I read recently (I could be wrong about this) that NY recently passed a bill that made it illegal to use fracking in the state.

You could indeed be wrong. WSJ: Coalition launched to work for NY fracking ban. Some environmentaly groups have got together to lobby for a ban. Others (such as the Sierra Club) do not favour a ban. So not even all environmentalists are doing 'everything' to stop it.

And at the legislative and executive level

The effort launched Monday comes as the state Department of Environmental Conservation works to complete a four-year review of whether shale gas development using the controversial technology known as "fracking" can be done safely under strict regulations.

Also Monday, a New York State Assembly proposal for an independent health impact study of hydraulic fracturing for natural gas has been dropped during budget negotiations. Numerous physicians and environmental groups criticized Gov. Andrew Cuomo and Senate Majority Leader Dean Skelos for blocking the $100,000 Assembly appropriation for a health study.

Cuomo has said a decision on whether to permit fracking in New York is likely in several months.

There's been a moratorium since 2008 while the State looks at fracking. The State has decided not to look at health effects, and so it seems likely that the moratorium will soon be lifted.

Additionally there is is: Propane fracking deal reached in NY; Plan would open 130,000 acres in Tioga County for drilling which came out today.

Brokers of the deal, between eCorp, GasFrac Energy Services, and the Tioga County Landowners Association, believe that fracking with natural gas is not included under a New York state moratorium that prevents drillers from using high volume hydraulic fracturing.

Archduke Russell John wrote:Here in PA with the large Marcellus Shale fields, Democrats are trying to pass laws that would either make fracking out right illegal or, failing that, place such onerous taxes and/or fees on fracking as to make it unfeasible to do it.

Well, given the side-effects of fracking, how are the industry going to account for externalities? Not sure I don't disagree with taxes on it or fees, after all, there are taxes and fees for all kinds of drilling, for good reasons.

You're gonna have to go further to prove your accusation that 'Liberals' and 'Democrats' are only interested in an outright ban, Archduke.

Still, the point is, that Federal Government money has helped to develop that industry. If you favour that industry and oppose 'Liberal' attempts to completely stop it, does this mean you are fine with the previous 'Liberal' investments in the 70s?

archduke from the article i linked:

The environmental concerns are well taken. But the best studies out now — such as one by a committee that included the head of the Environmental Defense Fund — suggest that fracking can be done in a safe and responsible manner. Many of the riskiest practices are employed by a small number of the lowest-cost producers, a situation that calls for sensible regulation. Larger companies would probably welcome a set of rules, because they would want to follow best practices to protect their reputation and brand.

There's a reason fracking has taken as long as it has to develop. It can affect the environment majorly if not done safely. Alll those test wells drilled with federal financial support have helped develop standards that are safe. There will always be operators who are willing to operate risky, below standard sites. (See BP Horizon disaster) . Thats why proper effective regulation in the industry is important. And an important reason the federal government invested in those original test sites, and helped Mitchell with their development work.

Its just another case where government involvement in an early stage, risky, and at the beginning unprofitable industry has turned out to be a significant advantage to the US. Its anotehr case where, the idea that govnerment canot be a valuable contributor to the development of your economy is proven false....

Interesting. Ricky, I think you are going to have to dig deeper (or at least more horizontally) to make your case:

1. Did the government pick winners in the 70's, 80's and 90's, or did they support research? The case against the Obama administration is that it has spent money picking winners (often based on political connections).
2. How much of the success of fracking is attributable to government investment and how much is attributable to private efforts?
3. One winner does not a successful government policy make. What is the totality of the government's track record on picking winners?

By the way, the abundance of natural gas in North America is a transformational story. Ten years ago this was not part of the equation. It has the ability to transform the energy equation in the US and the world and alter the balance of power. (Hopefully we will also protect our drinking water.)

My confirmation bias tells me that this illustrates the success and dynamism of capitalism. Your confirmation bias leads you to credit the state. Clearly we both need to dig deeper. Since I have limited time right now, and you brought it back up, go for it.

danivon wrote:There's been a moratorium since 2008 while the State looks at fracking. The State has decided not to look at health effects, and so it seems likely that the moratorium will soon be lifted.

It was probably the multi-year moratorium that I had read about then.

danivon wrote: Not sure I don't disagree with taxes on it or fees, after all, there are taxes and fees for all kinds of drilling, for good reasons.

I have no problems with taxes and fees to mitigate possible side effect. That is not a problem. The problem is when the point of the taxes and fees is to make the process so onerous that it can no longer be done.

danivon wrote:with the previous 'Liberal' investments in the 70s?

Was it Liberals in the 70's that made that investment. That sir is assumption of fact without proof. You are assuming that I don't support government grants also an assumption without proof. Considering part of my duties in my previous job was the grant coordinator, you know the guy responsible for helping people apply for gov't grants, I can tell you it is a falacious assumption on your part.

Well, all we have on the 'purpose' of the purported PA taxes/fees is your opinion. What do you have to back up you claims that they are onerous or punitive?

And as for my 'falacious assumption', all I can do is snort. Surely it had to be liberals. No true conservative would dare distort the free market using taxes in such a way!

ray

My confirmation bias tells me that this illustrates the success and dynamism of capitalism. Your confirmation bias leads you to credit the state.

If you track back on this conversation you'll find that I beleive there can, but doesn't necessarilly have to be, a role for government in the development of key sectors of the economy. What I've attacked is the notion that the US govnerment has never successfully engaged in this activity.And therefore shouldn't again...
This nostruum is unsupportable. There have been numerous instances I've referred to in this discussion (computers and the internet for example). The reason I'm illustrating this particular instance is that I'm specifically illustrating how a past government investment has turned out positively. Given the ideological rigidity of arguements oppossed to govenrment involvement this should NEVER happen. Nevertheless.... here we have natural gas....

1. Did the government pick winners in the 70's, 80's and 90's, or did they support research? The case against the Obama administration is that it has spent money picking winners (often based on political connections).

Mitchell Energy was picked as a partner. They could have been losers but they ended up winners... It wasn't the government that decided they were winners or losers.... it was the course of events. But they were picked as partners.....

2. How much of the success of fracking is attributable to government investment and how much is attributable to private efforts?

Without the initial involvment .... nothing would have have happened for years... How do we know this? There was no competitive activity to Mitchell....for years.

3. One winner does not a successful government policy make. What is the totality of the government's track record on picking winners?

Pretty good. Silicon Valley in its totality was a result of the development of the computer, which was largely subsidized in its earliest years by the US government.... If that was the only success, and it wasn't, it would make up for hundreds of small failures.

And again Ray, I know that there are failures. But even the investments that are failures today often pay off down the road, as the knowledge and experience gained by the people involved in the failure is appplied and a spin off develops. Without that initial start ....and failure .... the industrial culture is never developed. In the case of natural Gas, the first 20 years of Mitchell wouldn't have been described as a roaring success. But today, the US leads in this technology. Booyah for the early stage involvement by the Nixon, and Carter administrations...

Up here in Canada the same kind of early stage invovlement was largely responsible for the development of the Oil Sands. In the early years all that happened was government subsidized tests and then government subsidized production pioneering... Today, a mature indstry, proven out by the early stage involvement, attracts investment from around the world and sustains itself and pays enormous royalties and taxes. But the early stage priming by the govenrment was essential...
I don't think its possible to predict with 100% prescience which sectors and which investments will necessarily pay out. But like all entrepreneurs the risk reward is great. In the case of the oil sands, and now in the case of natural gas.....
What this ilustration does, is refute the ideological arguement against the government ever involving itself in this kind of investment.
And thats the objective of my comments. I can't and won't ever say that every government intervention is going to be successful, is worth making, or will pay off in the long run. But I think that often the risk reward for the nation is vital. Becasue usually entrepreneurs without government assistance couldn't sustain the effort required.
And those with "confirmation bias" towards the non-involvement should more carfeully look at the evidence of exactly where the US has been successful in the past. Too often they want to ignore the vital early stage role government has taken....
Confirmation bias? Or is it just willful ignorance of facts?

Ricky:

What I've attacked is the notion that the US govnerment has never successfully engaged in this activity.And therefore shouldn't again... The reason I'm illustrating this particular instance is that I'm specifically illustrating how a past government investment has turned out positively. Given the ideological rigidity of arguements oppossed to govenrment involvement this should NEVER happen.

Fair enough. There is definitely a role for the US government in scientific research, and I've said that many times before. There are great transformational technologies that our many years out that need fundamental government research. I also think there is a role for government in energy given the geopolitical questions and the externalities of energy.

Mitchell Energy was picked as a partner. They could have been losers but they ended up winners... It wasn't the government that decided they were winners or losers.... it was the course of events. But they were picked as partners.....

It does seem like there has been success here, but I wonder whether there is more to the story. They were picked as partners in the 70's and 80's and all of a sudden in the last 5 years (30 to 40 years later!) fracking becomes commercially successful. What happened in the intervening years ? There's just more to this story than is being presented.

Ricky:

Pretty good. Silicon Valley in its totality was a result of the development of the computer, which was largely subsidized in its earliest years by the US government.... If that was the only success, and it wasn't, it would make up for hundreds of small failures.

Yes, Ricky, you've mentioned that before. I get it. We agree that there is a place for the government to subsidize basic research, for science, for the military, for space, for weather, for health.

Now, the topic of this thread is about Obama's investment in alternative energy. He's invested in companies based on questionable science, it appears; sometimes he hasn't invested in scientific research, but in particular companies. It appears that the budgeting process wasn't done well, and that the funding was rushed based on the perceived urgency of our situation. It also seems that quite a bit of funding went to those politically connected to the administration (rent seeking).

How was Mitchell picked as a partner? What were the terms? Was it a loan, or a contract for research? Who owns the patents? Have they expired and that is why everyone is doing it?

I think it would be very interesting to compare the two approaches. When does government investing work, and when does it not work? Is it always worthwhile because some % of the investments will work out, or is it the job of the executive branch to figure out how to do it well so that we maximize the benefit and minimize the cost?

Also what percentage of Mitchell's R&D budget came from gov't funds, private VC, and company funds? How do those percentages compare to something like Solyndra?