WASHINGTON, March 23, 2016 – Wall Street opened modestly down Wednesday morning and looks like it will remain in the red for now. Major averages are off from 0.25 to 0.5 percent as of 10:40 a.m. EDT. Reasons for the drop vary, but may include news of a “raise the interest rates now” revolt within the Fed, aftershocks from the (unsurprising) terrorist attack on Brussels, a stronger dollar, a drop in commodities—you name it.
But what’s more interesting to us this morning are several reports indicating that “clean energy” darling SunEdison (SUNE), which has been tanking for months, may be about to declare Chapter 11 bankruptcy. It looks like the American taxpayer is once again about to take it on the ear, watching more millions of their hard-earned, government-impounded dollars head down the money crapper, courtesy of Barack Obama’s utopian “clean energy” fantasies.
As Sarah Palin once said, “How’s that hopey-changey stuff workin’ out for ya?”
More wasted taxpayer dollars
Back on October 19, 2015, Rob Nikolewski of Watchdog.org, took a look at the extent of those taxpayer subsidies.
“SunEdison, which bills itself as the world’s largest global renewable energy development company, had received at least $2.84 million in taxpayer money from the federal government.
“But a deeper look from the U.S. Department of Energy shows the company that has been going through financial difficulties has received $4.59 million.
“After Watchdog.org requested DOE comb through its records of renewable energy grants and loans, the agency said SunEdison picked up what’s called a cooperative agreement for $1,750,125 to help improve next-generation semiconductor materials.
“Under the payment structure of a cooperative award, SunEdison is reimbursed for all allowable expenses while being required to meet agreements to share costs… In addition to DOE money, SunEdison received grants totaling $1,874,901 from the federal stimulus package.”
Nikolewski proceeded to find even more in taxpayer subsidies for SunEdison’s fantasy business:
“The company also picked up $992,000 from the Obama administration in September 2009 for a 443-kilowatt photovoltaic system at Owens Corning’s facility in Kearney, New Jersey. Watchdog.org could not determine if the $992,000 was separate from or a part of the $778,734 grant SunEdison received from the stimulus grant it got from New Jersey in 2013.”
But wait! There’s even more!
“[R]enewable energy multinational Abengoa, based in Spain, has received an estimated $2.9 billion in grants and loan guarantees — that’s billion with a “b” — through the Department of Energy to undertake solar projects in three different states.”
That’s right. American taxpayers are subsidizing a Spanish energy company to waste even more American dollars on U.S. solar projects.
What could go wrong?
“In June , SunEdison announced it was selling off its stake in its semiconductor business for $193 million.”
“‘It’s been on multiple fronts where they’ve been favored by government subsidies,’ said William Yeatman, senior fellow at the Competitive Enterprise Institute, an organization that calls for free-market solutions to energy and environmental issues.
“‘This is the inherent danger, the inherent uncertainty, of any industry which fundamentally the success of their industry is based on preferential treatment from politicians,’ Yeatman said in a recent interview.”
Chapter 11 for SunEdison looks likely
Fast forward to a story that broke Tuesday, as outlined here by Motley Fool contributor Travis Hoium:
“Debtwire is reporting that SunEdison is negotiating with second lien loan creditors for a debtor-in-possession financing facility. According to Axiom Capital‘s Gordon Johnson, this would allow SunEdison to ‘pay their creditors “fair market value” for the secured assets versus the contracted value.'”
“The bigger story is that SunEdison is veering closer to bankruptcy by the day. We still haven’t seen financial statements from the fourth quarter of 2015, and now it’s apparent the company is running out of cash. For a renewable energy business that needs to constantly raise cash to build new projects, this turn of events doesn’t bode well for SunEdison’s future.”
No, it doesn’t. Perhaps SUNE will be the next failed fantasy project to go down the memory hole. In the process, its nearly inevitable failure will add to the total of Federal government uselessness and waste.
Referring to an already well-known taxpayer subsidized scandal, Nikolewski notes, “Solyndra ended up losing an estimated $535 million.”
Eco-gold at the end of a nonexistent rainbow
Other project large and small have also ended up on the trash heap of history, including failed battery maker A123, also the recipient of what the National Legal and Policy Center (NLPC) modestly terms “Recovery Act largesse – taken out of the hide of taxpayers…” Writing for NLPC on December 2, 2011, Paul Chesser noted that
“The Massachusetts-based energy storage company was given $249.1 million to help launch two battery-manufacturing plants in Michigan. A123 also received grants and tax credits from the state that could total more than $135 million. In a separate federal grant as a subcontractor for another grantee, A123 received nearly $30 million for a wind energy storage project.
“A123, which eventually went belly up via Chapter 11 ended up peddling its patent portfolio to Wanxiang America Corporation, which, in case you haven’t already figured it out, is a subsidiary of Wanxiang Group, China’s biggest auto parts firm. So taxpayers also subsidized new Chinese jobs.”
We won’t even mention failed “eco-automaker” Fisker or the much-ballyhooed “financial genius” Elon Musk, whose auto and space launch companies (and untold wealth) are also being heavily-subsidized by us. We fully expect Tesla (TSLA) to end up badly. Taxpayers are only going to subsidize mechanized toys for the rich for so long, or at least that’s what we hope.
Meanwhile, look at the carnage that’s already been left behind. We already know what happened to Solyndra. Those who invested in A123 stock during and after it’s IPO were left holding the bag. It looks like Abengoa (ABGB) and SUNE are teetering on the brink. Last October, Nikolewski observed
“Abengoa is also struggling. Its stock has plummeted from $29.32 about a year ago to $5.16 a share on Monday… As for SunEdison, its stock has plunged from a 52-week high of $33.45 to below $9 a share.”
That was then. This is now. In Wednesday morning trading action as we write this, ABGB is sitting at around $1.44 per share, while SUNE is precariously perched at $1.33. This pretty much gives you the odds on each company’s survival, although Spain, like many socialist European countries, may take it on because… jobs. Who knows how many more taxpayer-subsidized eco-follies have gone under in this country, or are about to?
Obama’s epic waste of other people’s money: ours
The Obama Administration’s continuing reckless gambles with our hard-earned money on so-called alternative or “green” energy projects constitute one of the most massive epic fails in modern history, not to mention one of the most gargantuan wastes of money ever.
But, as we all know,
global warming climate change is clearly the most pressing problem than anything else facing the world today. Barack Hussein Obama says so. But if you don’t believe his Administration, ask the residents of Brussels. We’re sure they’ll agree with our forward-thinking, fundamentally transformative, Nobel Prize-winning and soon-to-be ex-President, don’t you think?