This Will End In Tears
To Be A "Going Concern" Business, You Have To Solve A Problem
The WSJ reports $90 Billion went into “green” startups last year. That’s a lot of coin.
Back in December, I wrote this about CleanTech investing. It’s super trendy and all the cool kids are doing it.
When private investors invest money into these things, at least it is private money assuming the risk. When the government spends money on these things, taxpayers are on the hook and almost universally the money goes to cronies of the politicians doling it out. Yes, governments can never invest. When a politician says the words “government invest in” that means more spending.
Do you know what it is really about?
Smart people with serious voices and the right degree were able to put a good pitch deck together. They went to pension funds (who are also smart people with serious voices and the right degree) and they all nodded their heads that this time was the right time to fix climate change.
“ You know, it didn’t work the last ten times we did this, but things have changed.”
People will point to Solyndra as the poster child for failure in climate change investing but there are plenty of others. Can anyone point to one company that has done anything meaningful and measurable to stop climate change that was a venture-backed startup in the last fifteen years?
Electric cars are a prime example of investors feeling good about themselves and doing very little.
Where do electric cars get their power from? Most of the time it is fossil fuel powered power plants. Ironically, the folks that are all in on global warming are all out when it comes to the greenest power source of all, nuclear power. Until you build hundreds of nuclear power plants across the US, EV’s are not “green”.
EV’s also need batteries. What goes into the batteries? Stuff that you have to take out of the ground. Mining is a messy process. Just as messy as drilling for oil except when there is a problem with mining you don’t get emotional photos of oil covered animals getting washed by humans. Instead, they just shut the whole area off to humans so no one can go there and get sick.
Those batteries also wear out over time and have to be replaced. Ironically, the Tesla wall people put in their homes to store power starts to fail just about the time you need a new one and the subsidies run out.
Does it make you feel more confident, or less confident, that many of these companies in the green energy space raised money in the SPAC market? Discuss below. I’d love to hear from investors that bought the SPAC IPO and held on to it to see what their rate of return has been.
Did you put solar panels on your house? I thought seriously about it here in Nevada. Except, the panels wear out. The math didn’t work when it came to how much it would cost to install, how long it would last, and how much power is generated. I would only feel good about myself and could pat myself on the back. Plus, at cocktail parties I could tell everyone I had solar panels on my house and most probably get a favorable reception.
I do think that in its current form, green energy works for decentralized situations. It does not work for an on-demand information economy. It also doesn’t work for the military. If you are watching the war in Ukraine, Russia can’t fuel its armor with fossil fuels. Can you imagine the logistical problems it would have if it was green only? I can hear the tanker now, “Wait, I need three hours to recharge my tank battery before I can drive the next 7 miles.”
Green energy CEO’s say in unison, “There is a lot of progress coming.” In the early stages of the Depression, President Herbert Hoover said, “Good times are just around the corner.”
Great CEOs talk their book and are always selling. So do great investors. Warren Buffett’s annual letter is full of great information but it is also a tool to get you to buy Berkshire Hathaway stock.
The WSJ article I linked to talks mostly about battery storage and cars. Years ago I went to Fermilab near Chicago and spoke with real scientists about green energy. Even the ones doing research on solar power said without good battery storage, it was impossible to have reliable green energy.
Green cars are cool! They do not have exhaust which in places like LA can make a big difference in air quality. But, if you want to drive long distances they aren’t so cool and it is not just because there aren’t enough places to charge them.
Successful businesses solve problems. Except, the caveat to that is great businesses will solve a problem that they can wrap their arms around. Global warming isn’t one they can solve.
Yes, green is so cool. But also so cool is men winning championships in woman's sports and men being named woman of the year.
Super cool to shut down the nuclear power plants too.
So it's cool to chop your nuts off and shut down the best ways to stop emissions which one thinks leads to climate change.
It all makes perfect sense!
Whenever the temperature gets to 90 in the bay area it's an emergency now. Get a few days of it, which is completely normal, rolling blackouts. And they have banned your gas powered generator too. On your knees peasant, you're lucky we only charge you 12% for such privileges. Make a mil? You get to kick in 10k for mental health services that don't do shit.
Thanks as always for some sanity.
As soon as Al Gore told me the science was settled, I started to doubt because I know that the science is never settled. I'm now at the point where I start with the idea that the entire net zero policy goal is based on models. Models that diverge one from another and have not been converging over time. Weather/climate is the result of an almost infinite number of variables, and some of the variables are completely unpredictable (volcanos that erupt and emit so much ash into the atmosphere . . . ) and lately the model community have admitted they're having trouble getting clouds into the equation. When do we know if a model is a good predictor? Or off by a little, or off by a lot, or completely wrong? In economics, you'll know when the next employment or inflation or gdp reports come out, or when they come out at the end of the prediction period. If the climate models are off by a lot in one direction, we're all toast anyway. If they're off by a lot in the other direction, we've been played in the here and now, but will be dead and won't know how badly we've been played. If they're sorta accurate, I'm not sure it's that big a deal that we should all give up fossil fuels immediately and forever. So I am still very doubtful about the entire green enterprise, especially about the business end of it where so many are making so much through government subsidy.