60 Minutes: Distortion of Cleantech
As a regular 60 Minutes viewer, I was confounded by last Sunday’s piece, “The Cleantech Crash.” My organization is comprised of entrepreneurs, many of whom are doing quite well from the cleantech space, so we quickly sent this letter to 60 Minutes producers on their (unusually) poor journalism.
Still, I feel compelled to straighten some of the distortions played out in the segment. Let’s begin with a few facts:
- KiOR, the biofuel company featured in the story, has not accepted federal funding. This company is operational and funded by the private sector, except for a 2010 loan the State of Mississippi provided in exchange for the 80 jobs they are creating. What a curious example for 60 Minutes to use in its assertion that cleantech is crashing, and abusing federal taxpayer dollars.
- At no point did 60 Minutes mention the $14-52 billion of taxpayer dollars that go into subsidizing fossil fuels every year, or the $1 trillion we lost in oil dependence in 2011 and 2012.
- The eight failed companies listed in the 60 Minutes segment are dwarfed by the dozens of cleantech companies that have received federal funding, and are successful today. My annual research counts 4 failed biofuel companies out of over 75 investments since 2007. On the whole, this early market investment has a much higher rate of success compared with the venture capital sector (where 3 out of 4 investments fail), because we let the venture capitalists sink their money first.
- Energy is a HUGE market ($7 trillion) and rarely sees any changes without government support. Petroleum got its foothold when federal governments decided to move away from whale fat and kerosene, and provided price supports for drilling. As we look for alternatives to fossil fuels, if our government cannot provide a steadfast demand signal from a comprehensive energy policy, then new companies cannot access needed funding levels to cross the Valley of Death to commercial scale production. It is the lack of this demand signal that makes government entities need to support new technologies through grants and loans.
- The show complains that Chinese investors purchased a few companies that went bust after they received federal funding. CBS: That is globalism. U.S. companies also had the opportunity to purchase these companies, but the lack of an eager American buyer can hardly be described as “unfair” to U.S. taxpayers, when this Chinese company is still employing 6,000 Americans.
- $538 million went to Solyndra, which later went bust. What caused this bust was China spending $5 billion EACH to the top Chinese solar companies.
Finally, I’ll note what Robert Rapier said in his blog response to the piece. Robert reports, “I also pointed out to Lesley that cleantech is alive and well, and that there were a number of successes. I also told her that solar would eventually dominate every other energy source. None of that survived the edits. I think they really wanted my Khosla criticism on camera, and the rest of my views really didn’t support the narrative of the overall story.”
For better statistics on the state of cleantech, I prefer Clean Edge’s annual report on Clean Energy Trends.
Filed in: Blog • Mary Solecki