Are you concerned about another war in the Middle East right now? Let’s look at actions that our U.S. government took to make us less dependent on foreign oil.
Back in the depth of the 2008/2009 recession, the Department of Energy launched a loan and loan guarantee program[1] to finance energy infrastructure and for new energy technology that had yet to demonstrate a history of being commercially viable.
Since their first loan in 2009, this DOE Loan Programs Office has loaned or guaranteed loans of over $31.98 billion through 2018 in “high-impact, energy-related ventures” which couldn’t find traditional loans from private lenders. Sometimes people remember sound bites of one particular company that failed in this loan program (Solyndra) but, overall, the entire portfolio has achieved amazing success, financially and for our mission goals; substantially more energy has been now produced here in America and more than 27.1 million tons of greenhouse gas emissions have been avoided.
Energy projects cumulatively through 2018 have generated more than 54,597 gigawatt hours of power, annually now enough to power 950,000 homes.[2] Interest paid back to the program (and American taxpayers) has totaled $2.41 billion, there have been well over $9 billion in loan principal repayments, and of the portfolio companies in the fund, 78 percent are now ‘investment-grade’ borrowers, and loans are being paid on time. After the government’s lead, private investors came in with substantial funds into these projects and companies, providing a leverage effect from the government guarantees, which rippled out exponentially in economic growth in income and jobs.
I was reminded of this program’s success in listening to the Interchange podcast’s recent review of most influential stories of the decade.[3] In 2009, Tesla was in ‘dire straits’ and running out of money, but the DOE came in with a $465 million loan to Tesla, which was matched by an investment by Daimler automotive corporation, and which “enabled it to reopen a shuttered auto manufacturing plant in Fremont, Calif., and to produce battery packs, electric motors, and other powertrain components. Tesla vehicles have won wide acclaim, including the 2013 Car of the Year from both Motor Trend and Automotive magazine, and Consumer Reports recently rated Tesla’s Model S as tied for the best car ever rated.”[4] Tesla fully repaid back this loan in 2013, delivered 367,500 vehicles in 2019, a record 47x in 7 years, and TSLA stock was the best performing auto stock of the decade.[5] Moreover, Tesla built a system of charging stations nationwide that helped people feel comfortable buying an electric car and tipped the entire world into a new future of electric cars replacing old, oil-dependent technology.
Bottom line: Good job, DOE, in helping our nation become energy independent and less carbon-emitting through good lending! Less war for oil!
[1] https://www.energy.gov/sites/prod/files/2019/09/f67/DOE-LPO_FY2018_APSR_FINAL.pdf
[2] Ibid
[3] https://www.greentechmedia.com/articles/read/the-most-influential-stories-of-the-decade
[4] https://www.energy.gov/articles/moniz-tesla-repayment-shows-strength-energy-department-s-overall-loan-portfolio
[5] https://cleantechnica.com/2020/01/03/tesla-hits-2019-guidance-delivers-367500-vehicles-grows-50-over-2018/