The Department of Energy's Role in Promoting Green Projects
Which kinds of projects are benefiting, and how many permanent jobs are they expected to create?
Dan Calabrese (September 2010)
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A Robust Supply Chain
Mitch Pulwer, general manager of Celgard LLC, said the company sought to participate in the DOE program for two reasons.
"First, Celgard is the only significant battery separator supplier developing, manufacturing, and selling products here in the United States," Pulwer said. "And second, we believe that the DOE recognizes that if the United States is to have a vibrant domestic electric-drive-vehicle (EDV) industry, there needs to be a focus on a robust supply chain that includes critical component suppliers such as Celgard."
Celgard expects to supply all major producers of electric drive vehicles with the products it develops in North Carolina. "While we don't identify specific customers, most of the significant lithium battery manufacturers are working with Celgard products, either for production of lithium batteries used in existing electric-drive vehicles or in experimental trials for future vehicles," Pulwer said. "Celgard is certainly committed to supplying lithium battery separators to the U.S. and global EDV industry today and as it grows in the future."
Particularly in the area of batteries, a DOE report asserts that its funding is bringing components to the market for the first time that are capable of working with consumer-viable products - replacing older road-enabled batteries that cost as much as $33,000 each. The lack of affordable, highly functional batteries has been a particularly high barrier to the widespread adoption of electric vehicles. When the Recovery Act passed, batteries were too costly, too heavy, too bulky, and would wear out too quickly. Recovery Act investments are literally reshaping electric batteries and reshaping the economics of battery production and distribution.
The initiative has come under some criticism, however, on two fronts. One criticism involves the amount of money being invested on a per-job basis. Although the Abengoa facility will supply massive amounts of solar-generated energy to Arizona, and will even be able to store energy in order to keep the supplies running after sundown, the total cost of the loan guarantee comes out to nearly $400,000 per job, with many of these being temporary construction jobs.
And even in Michigan, which needs all the jobs it can get, some state lawmakers question the intervention of government on behalf of certain industries. In spite of the enthusiasm surrounding the Chevy Volt, for example, the car is expected to retail at a starting price of $40,000 - which makes it unlikely that it will be a big seller, at least initially.
Can all the companies gearing up their operations to supply GM for the Volt remain viable over the long term if a way isn't found to make the product more affordable to consumers? Michigan State Representative Chuck Moss (R-Birmingham) is skeptical.
"Any time the government puts its thumb on the scale for one choice or another it distorts the market," Moss said. "People make choices based on cost and perceived wants and needs. If the state passes laws that take wealth from some people and give it to others - say `green' products - it's interfered with the market. Subsidizing anything masks the true costs of a product and changes the cost calculations of consumers, diverting demand away from its natural course to the artificial market for government-preferred choices."
This is just one perspective, but perhaps it needs to be taken into account.