Demand for hydrogen fuel in Aiken still small as more funds go to the effort

http://chronicle.augusta.com/stories/2009/11/12/met_555469.shtml

Local Government

Honea Path to investigate spending habits of town officials

http://www.independentmail.com/news/2009/nov/11/honea-path-police-begin-investigation-rescue-squad/

Anderson County Council to discuss possible legal actions stemming from a financial report about past county administrations

http://www.independentmail.com/news/2009/nov/11/anderson-county-council-discuss-possible-legal-act/

Live in Oconee County, pay 75% more in property taxes

http://www.upstatetoday.com/news/2009/nov/11/live-here-pay-75-more/

Columbia City Council approves spending $150,000 on efficiency study

http://www.thestate.com/local/story/1024205.html

Bamberg places limits on groups soliciting for funds, donates money to local groups

http://www.thetandd.com/articles/2009/11/12/news/doc4afb64a750a1a129220811.txt

Stimulus Watch

Aiken County takes a step forward in securing $2 million in stimulus funds to refurbish sewer lines

http://www.aikenstandard.com/Local/1112VPSA

The Policy Council’s Best & Worst examines environmental legislation to anticipate in the 2010 session. Taxpayers need to be vigilant for initiatives that will have little or no impact on global climate change or local environmental protections – but will drive up costs for South Carolina homeowners and consumers.

At the same time, be on the lookout for the good ideas we hope will resurface in the coming year – measures that let local communities guide environmental decision-making, and returning control over the energy market in the state to the private sector.

For the full analysis, visit the Policy Council’s report on the Best & Worst ideas in state environmental policy.

Here’s a quick look at the good and the bad:

Best Ideas for 2010

1)       Empower Localities. Whenever possible the General Assembly should defer to localities regarding environmental concerns.

2)       Privatize the Energy Market. The state’s monopoly power over energy distorts the market, reducing competition and increasing costs to consumers.

3)       Energy Deregulation. Legislation creating energy regulatory bodies is 40 years old, and its original mission to bring energy to rural areas is obsolete. It’s time to loosen state regulations on energy providers.

Worst Ideas for 2010

1)       Mandating a Renewable Energy Portfolio. Legislation requiring electric utilities to expand the use of renewable energy resources threatens to cost jobs and raise consumer utility bills.

2)       Cap and Trade. This sweeping legislation now in Congress would create a system that caps CO₂ emissions at a politically acceptable level and creates a global marketplace to buy and sell allotted emissions levels. We estimate that the bill would cost South Carolina 18,965 jobs by 2020.

3)       More Subsidies for Hydrogen. Federal and state lawmakers persist in pushing hydrogen technology that experts agree is “one of the least efficient, most expensive ways to reduce greenhouse gases.”

Nothing in the foregoing should be construed as an attempt to aid or hinder passage of any legislation. Copyright 2009. South Carolina Policy Council Education Foundation, 1323 Pendleton Street, Columbia, South Carolina 29201.

The new hydrogen fueling station in Columbia is one of two in South Carolina. That equals the number of hydrogen-powered vehicles operating in the state.

South Carolina’s hydrogen industry has found itself quite an ally in the Charleston media.

This past weekend, The Post and Courier offered this decidedly uncritical view of the tens of millions in tax dollars that have been spent in South Carolina on hydrogen research while Thursday the industry turned to The Charleston Regional Business Journal for promotional assistance.

On the S.C. Hydrogen and Fuel Cell Alliance’s web page under its current news section, the group lists as its top story a piece from The Business Journal titled “Hydrogen investment may offer 10-1 return for South Carolina.”

The Alliance’s decision to post the story on its website this week is curious for two reasons: One, the article was published in the Charleston publication back in June; and two, the report simply parroted information released by legislative leaders that gave a misleading impression regarding what the Palmetto State is getting for its hydrogen investment. 

“The state’s investment in the hydrogen industry is seeing a return on its investment at a 10-to-1 ratio, said House Speaker Bobby Harrell Jr,” began The Business Journal’s piece.

“Through direct state appropriations and support of the Centers of Economic Excellence program, South Carolina has invested more than $12.2 million in hydrogen over the past 5 years,” the publication reported. “By conservative estimates, this has spurred more than $115 million in non-state investments.”

As the Policy Council reported earlier this year, what isn’t disclosed in this information is that most of these “non-state investments” have probably come in the form of local, county and federal tax dollars, rather than true private investment.

So the assertion that South Carolina “is leveraging its hydrogen investment dollars at a rate of more than 10 to 1,” likely means the state has gotten other elected officials to put taxpayer money into the hydrogen boondoggle – not that private business is necessarily investing in this research.

The Business Journal also repeats the statement that South Carolina’s “investment in hydrogen has created 229 jobs in South Carolina. With 65% of those jobs being created in the last 5 years, this is proving to be a growing industry.”

While technically this counts as growth, consider that 65 percent of 229 is less than 150. That means over the past five years, fewer than 30 jobs annually have been created from the tens of millions in tax dollars that have been invested in hydrogen.

And it’s unclear what kind of jobs are being discussed. If the tax dollars that have gone toward hydrogen research have been used by state agencies and publicly funded universities to hire lobbyists and consultants, that’s very different than private companies actually bringing aboard researchers and workers.

The story added that since 2003, the number of unemployed people in South Carolina has increased by more than 100 percent. Actually, since 2003, state unemployment has moved from 6.3 percent to 12.1 percent, an increase of about 92 percent.

Much of the South Carolina media seems reluctant to pull back the curtain on the realities associated with government-funded hydrogen transportation research.

The Obama administration has expressed grave doubts about the viability of hydrogen transportation, but that hasn’t kept the South Carolina media from hyping the concept like it’s a no-brainer solution to our nation’s energy concerns.

Take a story that appeared in The Charleston Post and Courier this past weekend. The piece provided a decidedly uncritical look at the tens of millions in tax dollars that have been invested in hydrogen research in South Carolina, even though there’s been little return on that investment.

Highlights from the story:

State taxpayers have chipped in $12.3 million to hydrogen fuel cell efforts, while federal, municipal and private sources have invested an additional $115 million in South Carolina, said Shannon Baxter-Clemmons, executive director of the S.C. Hydrogen and Fuel Cell Alliance.

A shining new building complex in Columbia and a billboard touting hydrogen’s potential greet motorists in the capital city.

The hydrogen group also has developed some political muscle.

When the Obama administration proposed cutting millions of dollars in federal hydrogen research to focus more on electric cars, the state’s congressional delegation and Columbia officials successfully lobbied to restore the money.

State lawmakers, such as House Speaker Bobby Harrell of Charleston, are big hydrogen supporters. But Gov. Mark Sanford generally has opposed state funding for hydrogen research.

Baxter-Clemmons said the state’s work on hydrogen would complement a wind power push. That’s because wind power could be a clean way to produce hydrogen and because hydrogen fuel cells would be a good way of storing energy when the wind isn’t blowing.

Now for some facts The Post and Courier left out:

• The S.C. Hydrogen and Fuel Cell Alliance has yet to provide the Policy Council with a breakdown of precisely what money came from what sources. That’s important because it is unclear how much private investment has gone into hydrogen research in South Carolina. All told, more than $130 million has been invested in hydrogen research, according to the alliance, but it’s not clear what taxpayers have gotten in return.
• The ”shining new building complex in Columbia” the story mentioned is believed to refer to the University of South Carolina’s Innovista research campus (The Post and Courier reporter who wrote the story was unavailable to clarify). Innovista sits largely vacant and uncompleted despite the infusion of more than $100 million in tax dollars because the university doesn’t have the money to finish the project and can’t entice private companies to sign on.
• In May, the Obama administration proposed cutting approximately $100 million in federal hydrogen research to focus more on electric cars because the infrastructure – fueling stations and hydrogen production and transport systems – is too costly and would take up to 20 years to develop. While the state’s congressional delegation and Columbia officials successfully lobbied to restore the money, it should say something about the viability of hydrogen transportation research that the Obama administration, which hasn’t been reluctant to spend money on much of anything, wanted to cut funding for this particular program.
• State lawmakers such as House Speaker Bobby Harrell of Charleston are indeed big hydrogen supporters, but their supporting data doesn’t always hold up under scrutiny. For example, earlier this year, Harrell released a statement that said hydrogen had proven to be a great investment for South Carolina. Among the facts he touted was this: “The public/private investment in hydrogen has created 229 jobs in South Carolina. With 65 percent of those jobs being created in the past five years, this is proving to be a growing industry.” But in reality that works out to fewer than 30 hydrogen-related jobs a year on average over the past half decade. Further, it’s unclear what kind of jobs Harrell was referring to. If the tens of millions in tax dollars that have gone toward hydrogen research have been used by state agencies and publicly funded universities to hire lobbyists and consultants, that’s hardly the type of economic development that has long-term economic benefits for the state. Innovista, for example, hasn’t created a single private sector job.
• The idea that hydrogen and wind power could work in tandem sounds nice in theory, but it’s much harder to pull off in reality. According to The Chicago Tribune, wind currently produces only about 1 percent of the United States’ electricity today, so it would take an immense uptick in development to make any sort of significant impact in terms of helping meet our nation’s energy needs. In addition, offshore wind turbines, which are the focus of S.C. research, aren’t cheap. Their foundations are much more costly than those built on land and must be designed to handle both wind forces and wave forces. In addition, there’s a need for undersea cabling, integration, etc. There are also issues related to the environment, shipping, fishing, coastal scenery and even seabed ownership to be considered.

But beyond those issues, wind’s unreliablity makes it a poor source of electricity.

According to a report issued by the North Carolina-based John Locke Foundation last year, “Wind power does not provide baseload electricity generation, which is the regular and consistent electricity needed to meet constant demand.

“Since wind is intermittent and variable, wind power also does not provide a dispatchable source of electricity to meet peak demand — it is not a source that can be called upon to meet excess demand for electricity. These weaknesses make other sources of electricity, such as coal, nuclear, and gas, far more valuable in meeting the demand for electricity.”

Creating jobs sure sounds good, but the reality is the jobs haven’t materialized.

State and USC leaders tore down a Hardees restaurant that employeed 20 people to make room for Innovista's Horizon I building. The taxpayer funded multi-million dollar building hosts zero private-sector jobs.

The university tore down a Hardees restaurant that once occupied the corner of Assembly and Blossom streets where the Horizon I building now stands. Other than the claim of a token presence by a few university researchers and the National Science Foundation, the 5-story building sits empty and largely unfinished.

The Hardees restaurant created 20 private-sector jobs. Horizon I, despite its multi-million dollar price tag, has thus far created no private-sector jobs. From the results, if state and university leaders were interested in creating jobs they would have been better off ditching Innovista and leaving the Hardees in place.

Constructing Horizon I eliminated a private-sector business responsible for 20 jobs and replaced it with an empty office building while costing state taxpayers millions of dollars. Not exactly a good return on investment.

These results are obviously a far cry from the “thousands of high-paying jobs” that Innovista was supposed to create as it ushered in the “hydrogen economy of the future.”Innovista’s failure illustrates precisely why government should never attempt to influence winners and losers in the economy.

A single fast-food restaurant did more for the South Carolina economy than Innovista has thus far…and you can’t even get fries with that.

For a detailed recap of Innovista’s failed promises, click here.

Many of the floors of Innovista's buildings are nothing more than empty shells, which can't be completed because of a lack of money.

Despite the clear failure of the “Innovista” research campus to live up to its promises of private investment and job creation, University of South Carolina President Harris Pastides refuses to stop pouring tax dollars into this increasingly expensive fantasy.  

Pastides pledged his ongoing support of Innovista at a USC Board of Trustees meeting last week, just days after the school was forced to fire the project’s second developer.

“Innovista remains a bedrock strategy for stimulating economic development,” Pastides told the trustees. “Innovista is about creating knowledge, jobs and investment.”

First of all, government bureaucrats – specifically ivory tower educrats – should never be responsible for economic development.

And Innovista isn’t about any of the things Pastides mentioned – because it hasn’t created anything resembling what taxpayers were promised. Instead, it’s been about empty taxpayer-funded buildings and unfulfilled government promises.

At this point, taxpayers have coughed up more than $100 million for Innovista, without much to show for their investment.

Hydrogen transportation research, supposed to be one of the keystones to Innovista’s future, has proven to be a bust so far.

Despite pouring more than $40 million in tax dollars into hydrogen research over the past few years, S.C. Speaker Bobby Harrell conceded recently that just 229 jobs had been created. And, many of those are state-supported academic positions, not private sector jobs.

Those results are obviously a far cry from the “thousands of high-paying jobs” that Innovista was supposed to create as it ushered in the “hydrogen economy of the future.”

In fact, even the free-spending administration of President Barack Obama has concluded that hydrogen transportation research is currently not practical (or profitable) enough to warrant public investment, further jeopardizing Innovista’s sustained viability.

South Carolinians obviously learned the lesson of hydrogen impracticability the hard way. At a combined cost of $2.7 million, our tax dollars purchased two hydrogen fuel filling stations – which is twice the number of hydrogen-powered cars currently operating in the state.

This is precisely why government shouldn’t try to pick winners and losers in the marketplace. Instead of a thriving economic development hub, Innovista has instead turned into a dumping ground for existing university colleges and programs.

In fact, having moved the University’s Arnold School of Public Health into Innovista, Pastides boasted to the trustees that this “fully occupied” building is “teeming with Innovista activity” – although it’s not clear if the school of public health’s “activity” was any different from what it would have been doing in its old facility.

With no private sector prospects to speak of, Pastides was forced to tout the construction of two new taxpayer-funded parking garages, which are about as empty as the buildings they serve.

“There are also two parking garages in Innovista and, as you know, without the vital infrastructure of parking, growth could not occur,” he said.

Nor will it ever occur as long as we leave government in charge of creating it.

For a detailed recap of Innovista’s failed promises, click here.

It’s difficult to tell what was more troubling about the pro-ethanol opinion piece The Myrtle Beach Sun-Times ran recently: that there are groups such as Americans for Democratic Action still pushing this propaganda or that one of South Carolina’s largest newspapers felt it was worthy of space in its pages.
 
While the Washington, D.C.-based organization does trot out several time-honored canards, such as the use of ethanol as a gasoline supplement reduces the cost by 40 cents per gallon (that difference is the result of subsidies because a gallon of ethanol costs far more to produce than a gallon of conventional gasoline), it also employs a new tactic, saying we need to continue this subsidy sinkhole because it’s “good for the economy.”

Don Kusler of Americans for Democratic Action, argues that we should continue throwing good money after bad because ethanol is a growing industry that’s producing secure domestic jobs.

If the ethanol industry is growing, it’s because it’s received tens of billions of dollars in subsidies over the past 30 years. With that kind of government support, what industry wouldn’t be producing “secure” domestic jobs?

If the ethanol industry is growing, it’s because it’s received tens of billions of dollars in subsidies over the past 30 years. With that kind of government support, what industry wouldn’t be producing “secure” domestic jobs?

And how is this any different than the old Soviet model of sucking money from society’s producers in order to find a job for everyone, even if there’s no need? The only difference is that instead of giving individuals jobs pushing buttons on elevators, we’ve got them involved in boondoggles such as ethanol.

Either way, it’s nothing more than wealth distribution: The government takes a chunk of money earned by taxpayers and, in this case, diverts it to businesses involved with corn ethanol production, which can then sell it at below-market cost because of the subsidy.

As The Milken Institute Review noted in 2007, ‘If ethanol had economic merit, no government assistance would be needed. Investors would pour money into the ethanol business and profits would be made… If ethanol lacks economic merit, however, no amount of subsidy is likely to provide it.”

Here are some other realities the pro-ethanol crowd isn’t eager to make known:

• For corn ethanol to completely displace gasoline consumption in this country, we would need to appropriate all U.S. cropland, turn it completely over to corn-ethanol production, and then find 20 percent more land for cultivation on top of that, according to The Cato Institute;
• Ethanol exhaust generates more than twice the amount of ozone as gasoline exhaust, according to the Clean Fuels Report comparison of fuel emissions; and
• The rush to produce more corn for fuel has had a global environmental impact as forests and other vegetation have been cleared to make way for cropland.

Something else ethanol enthusiasts won’t tell you is that increased ethanol production has led to a significant increase in corn prices. When corn prices spike, that can make everything from cereal to soft drinks more expensive since corn is used by itself or as a sweetener in so many products.

A recent Congressional Budget Office study found that increased ethanol production was responsible for 10-15 percent of last year’s increased U.S. food costs, which hurts all Americans, but especially the poor.

Higher prices also mean fewer goods purchased, which, contrary to Mr. Kusler’s assertion, translates to fewer jobs, something to consider in South Carolina, where our unemployment rate is more than 11 percent.

Ultimately, the problem with ethanol is that it not only ends up costing Americans more money, it’s wasteful. To dress up this corporate welfare as economic development is disingenuous.

The fact is, merely creating jobs does not produce wealth. The U.S. government could put unemployed people to work digging a ditch from Myrtle Beach to Los Angeles. After they finished, it could have them fill it in, then start all over again. Nothing would be accomplished, but we would have full employment.

All we’re doing by subsidizing ethanol is impoverishing Americans as a whole by taking their tax dollars to benefit businesses involved in ethanol production.

It’s not unlike what’s currently going on in South Carolina, where we’ve funneled tens of millions in tax dollars to hydrogen research, even though it’s unclear if the technology will be viable in terms of offsetting U.S. reliance of foreign oil or reducing carbon emissions.

If all the money that has been directed toward ethanol and hydrogen over the years had instead remained with businesses and taxpayers, those private businesses and individuals would been much more effective at creating jobs.

And that capital could have been used to give consumers something they really wanted, rather than the failed technologies that have been rammed down their throats by the alternative energy industry and government for decades.