Did You Know? Cash for Clunkers $ Taken from Alternative Energy Stimulus Dollars

In the midst of this really bad economy, at least corn prices have backed off their record highs, though how much that's reflected in the price of a bag of feed at your local feed store is quite variable. Once a higher price point is reached, it takes a while for the retail products to see a matching decline, if ever. While I don't feed corn to my cattle, I'm very aware of how the rising price of corn and other grains used in ethanol production has negatively impacted the value of livestock in the USA.

One possible hint of relief from the disastrous impact of increasing corn ethanol production is the growing research and ingenuity in designing electric cars, and getting our vehicles and machinery out of the lead acid battery dark ages (Lead-acid batteries were invented in 1859 by French physicist Gaston Plant�.) Also a possible source of relief from dependence on ethanol and fossil fuels is solar energy.

These collective alternative energy areas received much play in the days of the last presidential campaign. Theoretically, we now have an administration and Congress that has provided for the subsidy of these expensive new technologies (In most of Europe, the government has subsidized alternative energy growth with great success.) However, of the mere $6 Billion or so that was designated for alternative energy in the Trillion Dollar Stimulus Bill, Congress now proposes to riddle the original concept with red tape and wrinkles, and even worse they propose to take ~$2 Billion dollars of the $6 Billion, and divert those monies to the Cash for Clunkers money pit (IMO). Where is the logic there? I've not even noticed this focused on in the news!

Alternative energy companies are a natural to put folks back to work in places like Michigan where solar companies are already positioned and there is a ready labor force for production of solar panels and batteries, etc... Yet, this piddling bit of $6 Billion dollars for alternative energy has not only been NOT disbursed, it is now in danger of being given away to a program that pulls money out of your pocket and straight into the pocket of the automotive industry. In no way does this help the USA get off the ethanol track and put our corn back to use as Food for ourselves and our livestock.

August 10th Credit Suisse Alternative Energy Report:
Solar US market: Developments in the last week diminish the positive impact of the DOE's loan guarantee program for commercially viable solar PV technologies. There is a possibility that only ~$750mm is available to cover credit subsidy costs for commercially proven technologies (versus $6bb we thought 3 months ago). $2bb from the $6bb allocated for DOE loan guarantee program could be diverted to "cash for clunkers.�

Ethanol crush spreads have strengthened over the past few months, driven by lower natural gas and corn prices plus stable ethanol prices. Ethanol production volumes have been kept in check, helping to support ethanol pricing. Cash margins for ethanol producers have again turned positive.

Follow this link for the full Credit Suisse comments and analysis regarding the Cash for Clunkers ripping off the Alternative Energy sector.

Posted in: