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Clean Tech Crash? Hardly
In airing a premature obit for green energy, '60 Minutes' tarred an entire industry for the failures of a few companies, while ignoring success stories. Boo, we say.

Last Sunday’s “60 Minutes” report on the clean tech industry has inspired a torrent of teeth-gnashing criticism from those who have invested in sustainable energy projects, such as electric cars and next-gen biofuels, and journalists who cover the sector. As someone who spent months reporting and writing about the biofuels industry for last year’s OnEarth cover story, “Turning Grass Into Gas,” I fall into the latter category. It’s Wednesday and my teeth are still aching.

Billed as “The Cleantech Crash,” correspondent Lesley Stahl and producer Shachar Bar-On set up their report as a classic TV exposé of wasted taxpayer dollars. Their takeaway, as far as I could figure it, was that the federal government had invested billions of dollars in clean energy initiatives that later failed. And they failed because the people running the projects were either arrogant high-tech billionaires who got in over their heads, or they were out-and-out frauds who successfully pulled the wool over the government’s eyes.

President Obama’s administration ”spent about $150 billion” on clean tech innovations, Stahl reported, “but instead of breakthroughs, the sector suffered a string of expensive tax-funded flops.” Conclusion: green energy is a sham.

Where do I even begin?

How about that $150 billion number. I’m not sure where “60 Minutes” got it, but according to a recent report by the Information Technology and Innovation Foundation, a Washington, D.C., think tank, the federal government invested about $64 billion in the clean tech sector during President Obama’s first term. That averages out to about $16 billion per year spent to encourage development of a future energy supply that will cause far less harm to our health, climate, and environment than fossil fuels, which the federal government is already giving $15 billion a year in subsidies. These are some of the most profitable corporations in the history of the world, mind you, working in fully mature markets with proven technologies while exacerbating the rise of atmospheric CO2. If any taxpayer money is being wasted, maybe look to them, first?

The “60 Minutes” segment actually didn’t even cover the depth and breadth of the clean tech industry as a whole, instead focusing most of its time on a particular difficult niche: cellulosic biofuels. I spent a good portion of 2013 reporting on cellulosic, which is a tiny subset of the biofuels industry. “KiOR is a biofuel company that’s replacing oil drilling with oil making,” Stahl said. And that much is true. Partly funded by former Sun Microsystems CEO Vinod Khosla, KiOR is trying to develop a profitable process for turning wood into gasoline, diesel, and ethanol.

Turning wood or grass into gas is extremely hard to do at commercial scale, and many of the companies that jumped into the business back in the mid-2000s did indeed fail. In 2005, cellulosic executives vastly underestimated the amount of time it would take their companies to produce large volumes of fuel. It’s taken them nearly a decade to start pumping out commercial quantities. KiOR, along with larger energy players such as INEOS, is one of the few companies to complete a cellulosic refinery and actually produce fuel.

Many people, including taxpayers, lost money in the cellulosic sector. And it’s true that grass-to-gas fuel is unlikely to be our carbon salvation, replacing the drill-sourced product at your local Shell station anytime soon. But cellulosic fuel does, right now, have promising niche markets awaiting the flow of more product. Airlines like Qantas and Lufthansa are hoping cellulosic will help them fly on greener fuel. Chemical companies like BASF see a lot of promise in using cellulosic-based hydrocarbons to green up their product lines. Yet in the “60 Minutes” report, cellulosic fuel—and KiOR in particular—was portrayed as a complete boondoggle.

“Despite hundreds of millions of dollars invested,” including $165 million of Vinod Khosla’s own money, said Stahl, “KiOR is still in the red, and the manufacturing is so complex, it is riddled with delays.”

True. You know who’s also in the red? Amazon. Twitter. Instagram. Facebook. But ... and here’s the important part … KiOR isn’t in the red with federal taxpayers’ money. Back in 2011 the company decided to not pursue a federal loan guarantee. The only public financing on KiOR’s books is a $75 million low-interest loan from the state of Mississippi, given to convince the company to build its first commercial refinery in the state. Which it did. KiOR’s Columbus, Mississippi, facility produced 920,000 gallons of cellulosic fuel in 2013. In the advanced biofuel world, KiOR was one of the year’s success stories.

KiOR isn’t perfect. It’s still dealing with delays and technical difficulties. But if this is the worst that clean tech has to offer, the prognosis for the sector is outstanding.

One more insider observation I can make that you might find interesting: Stahl and her producer used energy analyst Robert Rapier to back up their claims. But if you read Rapier’s work, as I have, you’ll find that he’s not exactly claiming that clean tech has crashed. Far from it.

I had a chance to interview Rapier while researching my own story. He’s a smart engineer, and his energy blog is worth following. Rapier often has a fresh take on green energy developments, which is why I enjoyed talking to him and keep reading his stuff. Khosla has been one of Rapier’s hobbyhorses; he thinks the famous investor is hurting the biofuels sector by over-promising, under-delivering, and not knowing enough about the industry in which he’s investing. (You can read Rapier’s response to the “60 Minutes” piece on his blog.) The problem is that Stahl took Rapier’s criticisms of Khosla and wildly extrapolated them to smear the entire green energy sector—and make claims that simply were not true.

Where was the evidence of clean tech’s crash in the “60 Minutes” report? It seemed to boil down to the fact that Solyndra, Fisker, LG Chem, and five other clean tech companies went bankrupt. All true. But meanwhile, solar panel manufacturers and installers just recorded the second-largest quarter in the history of the U.S. solar market. And 2013 may mark the first time in more than 15 years that the United States installs more solar capacity than Germany, the world leader. High demand for the all-electric Nissan Leaf is forcing the automaker to increase U.S. production of the car, and sales of plug-in vehicles in the U.S. nearly doubled in 2013. How’s wind energy doing? How about 28 percent growth in the United States in 2012.

“So, is clean tech dead?” Stahl asked.


Ginning up a hit piece is easy. You take a failed company, interview a few experts, edit their comments, use the bankrupt company to represent an entire industry, and voila! What’s hard is finding a way to help people understand the real issues involved in using taxpayer money to support emerging technologies, asking hard questions about if and when we should cut off that support, and, significantly, inquiring whether the goals underlying that support are—or are not—worth pursuing.

Here’s the conclusion I came to in my story last year: “It’s tough to know how the cellulosic story will end, or whether the grand ambitions of 2007 will ever be realized. Yet it’s clear that predictions of cellulosic’s demise have proved to be premature.” Stahl’s report is just one more of those premature predictions; the final chapter of the cellulosic story remains to be written. But for the clean tech industry as a whole, the evidence of its success is overwhelming—except, apparently, to a few journalists at “60 Minutes.”

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image of Bruce Barcott
Bruce Barcott was a 2009 Guggenheim Fellow in nonfiction and is the author of The Last Flight of the Scarlet Macaw and The Measure of a Mountain: Beauty and Terror on Mount Rainier. He writes frequently about the outdoors and the environment for such publications as the New York Times Magazine, Outside, Harper's, and Sports Illustrated. MORE STORIES ➔
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As usual 60 minutes has done a great job; you can't change reality. So is the Chinese buyer of distressed properties, and so has Mr. Kosla, and I bet other investors. And, the Obama Administration has wisely invested in the industry; shotgun style. Further, the problem is not Fracking and forth generation gas and oil. We will need these as a transition technology, so we can avoid ruinous madness such as tar sands, and food based ethanol. These are all wise and brave people doing the right thing, if a little late. Of course a strong carbon tax is far more elegant and effective, but the antiquated congressional structure is not designed for strong action, just the opposite. So what is the problem? The capitalist system? No. It is the best system for allocating resources and accelerating selection of opportunity. The problem is that we have not yet found the right answer, and the market is telling us that, in no uncertain terms. The detail of the solution can be identified right here, right now, on this web site, and in each person. Pluvinergy, or something like it is just around the corner. If it is not, may Mr. Malthus RIP, it will not be pretty. But if rain does fall, and the sun does shine, Pluvinergy offers a potent, and complete solution. The problem with it is that it is what it is must be: hugely profitable, extremely simple, and more than totally benign; it actually controls the climate catastrophe on time, as feedback tripping points start to manifest within the next 3 decades. That is a problem. People expect a solution to be fantastic, difficult, and expensive; everything that Pluvinergy is not. That's the problem. Those who have heard of Pluvinergy, and have not looked at it will know this is the truth when they finally realize it is the real thing. So, there is the solution. I hope I am right, my lovely baby, and grandchildren are counting on us; all of us.