RENEWABLE ENERGY SINK-HOLE
-- Federal Renewable Energy Funders keep up the pretense of wanting to find “solutions”.
By Jim Miller

The current Federal Funders and grantees are and have been for many years, “gaming the system” and winning. Congress and the taxpayers are the losers. It's time to change the odds in the Federal Slot Machine, level the playing field among all grant applicants-- large and small – those with and without Ph.D's on their staff – and which involve early stage “risks”. For instance, cut-off or greatly reduce grants to Rand, SRI and SAIC and put those “reserved” funds in the hands of early stage, startups which have promising energy production technology solutions, on the theory: “More Bang for the Buck”.

I've figured out why the U.S. Government has not accomplished much in the field of biomass and other renewable energy sources, except for the subsidy gifts to food/feed crop-based ethanol processing industry.

• Most of the ethanol subsidy gifts go to the major agri-mega-corporations, which are staunchly Republican and can be counted on for copious amounts of Republican campaign contributions. Thus, nothing much happens.
• Voters in the Corn Belt are pleased with the subsidy gifts from the rest of the U.S. Taxpayers.
• Sellers of E85 derive some slight cost reduction (in theory).
• The Bush Administration is opposed to renewable energy sources, except for their public relations value. Bush's OMB cut 25 million from the NREL budget the day after Bush's 2007 State of the Union speech where he extolled the virtues of renewable energy.
• Renewable energy, especially liquid fuels, compete with the Seven Sisters and the infrastructure which supports them and feeds off them. They spare no lobbing expense to kill Renewables funding.
• The Federal Funders for renewable energy grants, prefer funding “studies” at universities and think thanks, which only do studies and more studies and very seldom reach a true solution. This keeps the cash flowing to their feeding dishes – why ruin a good thing by finding a true solution which would end the grants and reduce the cash flow from Congress? Studies are cheap to do, so the net profits to the grantees are huge.
• The Federal energy agencies are complicit in this plan. So long as there is a huge need to become energy independent, there will always be high need for the federal agencies and laboratories – thus ensuring funding and employment for the hordes of federal employees and the federal contractors and suppliers. As long as no real solution is obtained, the cash flow from Congress and the U.S. Treasury keeps on flowing.
• Most Federal awards are made with an equity participation on the grantee side required. This insures that only existing companies which have plenty of resources receive the awards.
• Many of the funded projects are for companies which have a history of obtaining grants, thus making the “vetting” of grant proposals a rubber stamp operation.
• Innovative discoveries are thus discouraged, largely because most of the inventors are not personally wealthy. This keeps down the flow of work by the Federal Funders, thus making the employees' jobs a snap to do, then spend the rest of the day attending meetings or on the phone.
• Federal Energy Development Loans/grants are made on hard-nosed, banker terms, thus few go to revolutionary discoveries, because most of those are early stage and involves “risks”. Federal Funders direct the awards to very small increments of existing, proven technology on the theory: “Many Bucks for Few Bangs”.
• Government employees choose to work for government in large part because of job security (low risk of being fired), the longevity of government programs and funding cycles (endless backlog of perceived need/customers), and low demands for performance, other than being to being to work on time. They are necessarily “risk adverse” in their personal life and carry that attitude into their job performance. Thus if an application is “too entrepreneurial” or risk-taking, it is killed in favor of low risk, safe, predictable outcome studies and experiments.
• Grants have hidden criteria. The most common on is that the study or experiment must have been completed, the documentation prepared, but not published, but otherwise ready to be published. The grant is made, then the report is published. This approach further reduces the risk of failure of the study or experiment. The result is that only well-financed companies and universities can afford to play this game.
• Grant applicants who are generally successful, have “gamed” the system, by establishing friendly relations with one or more staff persons who are at the center of the grant approval and funding process. These “ultimate insiders” lobby the applicant's grants through the system. Their rewards come when they need a job or retire. One or more “client” applicants are sure to employ the former inside lobbyist.
• Nearly all loans/grants are given to companies and institutions, who have the financial ability to employ a Ph.D. In the field of discovery – a very costly approach. Without a Ph.D. as the “Principal Investigator” the grant/loan applicant has no hope of gaining an audience and a grant/loan.
• Simple question: Why after all the billions of Federal Funding to these traditional grantees, don't we have many solutions to our energy needs? The answer is that the solutions are not that hard to find. They are hard to implement because the implementation is not in the best interest of Federal and State Funders nor of the corporate or institutional grantees.
• Venture Capitalists are no help where the inventor will not help commit fraud on the future buyer of the business or technology by over blowing the invention to implement the “exit strategy”.

Why should Congress and the American taxpayers put money into basic R and D if industry is not willing to do so?

“Yet U.S. industry is investing less and less in basic research and development (R&D). As a percentage of sales in industry, R&D has been falling since 2000, but more importantly, industry contributed only 4 percent of its R&D budget to the basic research that drives future breakthroughs.2 In an economic landscape dominated by the need for short-term capital returns, the immediate incentive to sustain large commercial research centers simply does not exist, as evidenced by the recent demise of Bell Labs. These outposts of learning have been crucial to American technological advancement, and the reduction of their role is not a propitious sign.”

Short-Changing Our Future: America's Penny-Wise, Pound-Foolish Approach to Supporting Tomorrow's Scientists

By Michael J. Biercuk, Ph.D.
http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=140&subsecid=289&contentid=254793

We should not let the stupidity and greed of Top-Down Capitalists determine the health of our economic growth based on science and engineering research and development. We need to put Federal research support into the baskets of Bottom-up Capitalists such as worker owned enterprises.

What Congress needs do is to strip down the Federal Funders (the first Signal) and make it very clear that there are milestones each agency must reach by dates certain, or the agency will be shut down and the federal employees fired (the second Signal). When an agency fails the test, the agency should be closed down, and the Federal Funding should then be offered to the States on this basis: Research, Discovery, Design, Implement and bring to full production by dates certain, or get cut off.


Jim Miller
jimmiller5417@yahoo.com
October 16, 2008