But on the road to the showroom, the hydrogen car made a wrong turn. From 2004 through 2008, the federal government poured $1.2 billion into hydrogen vehicle projects; the Government Accountability Office noted that about a quarter of that money went to “congressionally directed projects” outside the initiative’s original research and development scope. Visitors to General Motors outside Detroit could drive a vehicle powered by hydrogen, but the technology was costly, and there was no infrastructure to support the vehicles. They died in development.
The “clean coal” movement has been no more successful. Politicians on both sides of the aisle have sought to put money into efforts that would make coal more appealing by taking its greenhouse emissions and burying them. After a carbon-capture project in Alaska burned through $117 million during the 1990s, Republican lawmakers tried to give the moribund project another $125 million in 2005. Just this year, the utility AEP, one of the nation’s largest emitters of carbon dioxide, abandoned a pilot project because it was too expensive — even though the Energy Department was willing to kick in $334 million, half the expected cost. A North Dakota project was shelved last December despite a $100 million federal grant.
Bush launched what was supposed to be a $1 billion project to separate carbon dioxide from the emissions of a coal power plant in Illinois and bury the gas underground. Several years later, cost estimates have climbed, the project has been scaled back — and it still hasn’t broken ground.
Despite this track record and the recent Solyndra failure, Energy Secretary Chu remains undeterred. Citing examples from Civil War-era railroads to airplanes to semiconductors, he has defended government’s role in funding new technologies and promising companies.
“Americans have always led by looking ahead. Even in the midst of the Civil War, when our country was under incredible stress, we planned for the future,” Chu said in September. “President Lincoln signed the Pacific Railway Act of 1862, which authorized generous public financing for two private companies — Union Pacific Railroad Company and Central Pacific Railroad Company — to lower the investor risk in building railroads in unsettled territories. In 1869, the first Transcontinental Railroad was completed at Promontory Summit, Utah, revolutionizing transport in this country and opening up a world of possibilities for industry.”
Enter Stanford University professor Richard White, a historian of the American West who wrote “Railroaded: The Transcontinentals and the Making of Modern America.”
“I admire Steven Chu a great deal, but his knowledge of the Pacific Railway Act unfortunately appears to be about equal to my knowledge of high-energy physics,” White said in an interview. He said the legislation produced a disaster far larger than the lifeless factory that Solyndra has left behind.
White said that Union Pacific and Central Pacific became two of the most hated corporations in the West, spawning political opposition wherever they went. Within 10 years of giving them land grants and loan guarantees, the federal government reversed its policy and eventually sued to recover its investment. The litigation dragged on into the 20th century.
Chu has also argued that the government should help ramp up manufacturing. He says that while the internal-combustion engine was invented in Germany, Henry Ford mastered the assembly line and made the United States the world leader in automaking. However, historians note, Ford did not receive government assistance.
Some experts also question the semiconductor example, in which the government purportedly created an industry through military purchases. Jack Spencer, a nuclear power and energy expert at the Heritage Foundation, said that the Pentagon supported the semiconductor industry because it wanted “to kill people better through innovation, but its goal wasn’t to create commercial enterprises.”
Moreover, he added, if the broader marketplace hasn’t created enough incentives for a new technology such as solar or wind energy to thrive, then loan guarantees or grants will only postpone the death of a company.
But Chu isn’t the only one who thinks the government has a role to play.
David Eaglesham, chief technology officer at First Solar, a leading maker of thin-film solar panels, says government funding for basic research during the 1990s kept the company alive when it comprised about “10 guys working in Toledo.” He said the Energy Department’s National Renewable Energy Laboratory funded “pretty much everything” when it came to technology, but “at low levels.”