D. Dowd Muska


‘Green Jobs,’ Drifting Out to Sea

September 05, 2013

It’s a fundamental rule of PR: flaunt achievements, disregard setbacks.

Ocean Power Technologies (OPT) employed the strategy when it issued a press release about a new federal subsidy and ignored a shockingly competent account of a colossal failure.

First the moolah: On September 5th, the company trumpeted a “Small Business Innovation Research (SBIR) Phase I grant of approximately $150,000 to study advanced control methods for maximizing the wave energy harvesting capability of its PowerBuoy products.” OPT crowed that less than 12 percent of the U.S. Department of Energy’s “SBIR and related Small Business Technology Transfer funding applications were granted in this latest funding round.”

A few days earlier, OPT declined to disseminate an unflattering story about its marquee endeavor. Oregonian reporter Elizabeth Case, committing an act of honest-to-gosh journalism, examined the status of what was to be “America’s first wave-powered utility.”

A PowerBuoy -- The New York Times likened it to “a giant cannon stuffed with electronics” -- was supposed to head into the Pacific surf for testing in the middle of 2009. But Case found that “regulatory and technical difficulties have all but halted the project.” The Federal Energy Regulatory Commission “notified the company earlier this year it had violated its license after failing to file a variety of plans and assessments.” It gets uglier: “All that remains in the water are pieces of a single anchoring system on the ocean floor. State officials have told the New Jersey company to remove them by month’s end.”

Even before its debacle in Oregon, OPT’s stock had plunged into the dumpster -- down nearly 90 percent since its 2007 IPO. The implosion of such a heavily publicized effort isn’t likely to boost investor interest.

Marine and hydrokinetic (MHK) power is an oft-overlooked branch of the Potemkin industry known as “green energy.” Waves, currents, and tides, like solar and wind, are free. So to the country’s energy-illiterate elites, MHK can’t not be part of the glorious renewable future. The subsidies are substantial -- OPT has received copious funding from the Department of Energy, the Navy, the Australian government, and the state treasuries of Oregon and New Jersey. The day the company received its fresh D.C. windfall, many others did, too, including Resolute Marine Energy, ABB, Columbia Power Technologies, Ocean Energy USA, the University of Maine, the Electric Power Research Institute, Oak Ridge National Laboratory, the University of Washington, Oregon State University, and Florida Atlantic University.

MHK does have a success story, but using the term is charitable. In the summer of 2012, Ocean Renewable Power Company (ORPC) began generating juice for the grid through a turbine placed beneath Maine’s Cobscook Bay. The device is no overachiever -- at peak, it produces 180 kilowatts, or 0.02 percent of a large nuclear- or coal-fueled station. It’s hardly surprising that ORPC is a corporate-welfare queen, or that it has fallen far short of its original goal of 5 megawatts of electricity by 2011. (A few hundred miles south, Verdant Power has yet to connect its East River turbines to the grid, despite more than a decade of experimentation.)

There’s no solid estimate of the revenue that’s been squandered on MHK’s multiple flops. At the federal level, the sum is surely in the tens of millions of dollars. But don’t expect funding to be cut. A constituency, however small, has been built. Beneficiaries -- e.g., employees, investors, consultants, and researchers -- have grown accustomed to the largesse. They’ll keep the pressure on to maintain the status quo, regardless of meager performance, while oblivious taxpayers supply the cash.

Will MHK, one day, cheaply generate electricity? The only honest response is: Who knows? In 1988, a Sandia National Laboratories scientist told Newsweek that “photovoltaics will make a serious contribution to the energy needs of the 1990s.” In 2011, according to federal statisticians, solar generated 0.047 percent of the nation’s electricity. America’s oil and natural-gas industries are booming, but few predicted the fracking phenomenon. Until just recently, “experts” were convinced that nuclear power would make a comeback. Now, existing reactors are being shuttered, and proposed stations are being canceled.

The right coalescence of technical and economic factors could make MHK flourish within a decade or three. (Assuming, of course, that NIMBYism is defeated.) But if infeasibility is certain, every penny of Washington assistance is wasted. And if money can be made from ocean-borne electricity, why is government involved at all?

Energy revolutions belong in the hands of dreamers, tinkerers, engineers, and venture capitalists -- not under the thumbs of politicians and bureaucrats.

D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.

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