Failure Factories

Plant has not produced a single battery designed by lab where Obama spoke Friday, IG reports

Obama speech at Argonne National Laboratory / AP
March 18, 2013

President Barack Obama touted a plan to step up green energy subsidies on Friday at an Energy Department laboratory that critics say is emblematic of the government’s failure to succeed with taxpayer-funded green energy projects.

The University of Chicago-based lab where Obama spoke has partnered with a company to develop batteries for electric vehicles. However, the stimulus-funded manufacturing facility that was supposed to produce the batteries—themselves the product of stimulus subsidies for research and development—has yet to furnish a single one.

The president’s green energy proposal calls for using revenues from oil and gas lease sales to fund an additional $2 billion in subsidies for green energy projects.

Obama outlined the plan in more detail at a speech Friday afternoon at DOE’s Argonne National Laboratory at the University of Chicago, which received more than $200 million in stimulus subsidies and contracts for electric vehicle research, among other projects.

Argonne worked with the company LG Chem Michigan in 2011 to produce electric vehicle batteries. The lab provided its patented design for those batteries to the company, which was supposed to manufacture them at its Holland, Mich., plant.

That plant received a $151 million stimulus grant, covering half the costs of its construction.

According to the Energy Department’s inspector general, as of last month the plant had yet to produce a single battery that could be used to power electric vehicles.

LG Chem cited poor demand for Chevrolet’s electric car, the Volt, as the cause of its lackluster manufacturing performance. The Argonne design was specifically intended for use in the Volt.

Instead of producing batteries, the IG found, workers at the Holland plant were paid to play video games, watch movies, and volunteer at local nonprofit groups.

Neither LG Chem nor Argonne returned requests for comment.

General Motors, which produces the Volt, also obtained licensing for Argonne’s battery technology.

Argonne, LG Chem, and General Motors are all part of what William Yeatman, an energy policy expert at the Competitive Enterprise Institute, describes as a "vertically integrated subsidy."

Yeatman said the Obama administration "is trying to create an industry [electric vehicles] out of whole cloth, and it finds the only way it can do that is to subsidize every link in the supply chain," from research and development to battery production to vehicle manufacturing to consumer purchases.

The Volt is "already failing by its own standards," Yeatman said, noting the president pledged to get 1 million electric vehicles on the road by 2015, fueling critics of the president’s new green energy subsidy plan who say his decision to hold an unveiling event at the Argonne lab actually reinforces critiques of the policy.

"Taxpayers should keep the president's risky energy ventures in mind when he demands they pay more in taxes," said Rep. Mike Pompeo (R., Kan.) in a statement to the Washington Free Beacon. 

"Why is a taxpayer-funded research facility designing electric vehicles for a bailed-out car company, and why would we continue to fund that research that people don't want?" Pompeo asked.

Pompeo said Obama’s speech on Friday amounted to "a call for greater corporate welfare and wasteful spending."

Pompeo has sponsored legislation to repeal all federal energy tax credits.