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The stimulus and green jobs

by Jerome a Paris Fri Nov 13th, 2009 at 09:42:56 AM EST

Recently, there have been worried or outraged articles in the blogosphere (and here on dKos) about the stimulus money going to help create jobs in Canada, China, or going into the pockets of foreign multinational companies.

I'd like to make a few comments on this.

part of my series on wind power

Front-paged by afew


  1. one of the reasons US projects need to import foreign-manufactured turbines is that the US-based production capacity is currently equal to less than 2/3 of the overall US market for new installations. Just under 8,000MW will be installed this year, with a current manufacturing capacity of 5,500MW. Many manufacturers are investing to build new factories, but this will take time;

  2. the main reason there is not enough manufacturing capacity is because the US has an appalling track record in supporting the industry: 3 times over the past decade, Congress allowed the main regulatory instrument, the PTC, to elapse, causing a catastrophic drop in installations:

    This had global consequences - the disappearance of one quarter of the world market is not an easy event to deal with - and almost caused the bankruptcy of several turbines manufacturers (some were bought out). Ever since, manufacturers have probably undersized their investments, in order to be able to deal with such a potential drop in demand, and they mostly avoided the US as a production base as a result, even though there are serious logistical advantages in this (heavy) industry to be located near your market.

    There is no secret: the only way to have manufacturing investment in an industry which needs no subsidies, but a specific regulatory framework is to have stable policies and, dare I say it, an industrial policy to promote both the wind industry (a good thing in itself) and the wind turbine manufacturing industry.

    This is still missing, right now. States are doing this at the local level, but it would make a lot of sense to do it at the federal level.

  3. One of the reasons why the early federal grants have gone to European companies is that they are amongst the main investors in the sector in the US (and globally) - because they are familiar with the sector, because they know how it works, because they have better access to the (artificially scarce) turbines, and are willing to invest in the US whenever it makes sense to do so. The sector is now a strategic activity for most big utilities in Europe, initiially because they were forced by public authorities to invest, and now because they like the returns they get, and they have massive investment programmes at home and elsewhere. And the European suppliers are following them. Protectionism might choke that source of investment.

  4. additionally, a large part of the money being invested in the US wind sector actually comes from European banks. The industry has largely been financed by project finance (which is my job), and that is a lending activity and not a capital markets activity - thus it did not interest US investment banks. So European bank balance sheet money has poured into the US wind sector to the tune of many billion dollars per year over the last several years. The financial crisis disrupted this for a while, but the European banks are now back at it. Again, protectionnism might be a double-edged sword.

  5. furthermore, a lot of the US-based solar manufacturing industry has come to life thanks to the generous tariffs provided in Germany and Spain for solar power: this help built the local industry, but significant amounts also went to manufacturers from around the world, including some large US players.

  6. While the worriers note that 50% of the jobs in wind come from manufacturing, it is also true that the other 50% are local (installation and long term maintenance and by nature not offshoreable - these will stay for the long run (that's more jobs than when you buy oil or coal-fired electricity, in any case); separately, building wind power generation is a good thing per se, avoiding carbon emissions, reducing dependency on fossil fuels (while natural gas is plentiful this year, there are still plenty of long term worries) and offering a stable-priced long term generation capacity.

As Natasha Chart noted in her sensible article on the topic, there are a few things that can be done:

  • local content requirements (say, 30-50% of the investment) are legal, and legitimate, and can help build up the local infrasturcture and industry;
  • but they will work only in the framework of stable policies that are long enough, and credibly so, and not subject to the whims of politicians too scared of "socialism" or "subsidies" to keep at it;

The reality is - you get what you want. You cannot have the creation of large scale manufacturing employment without, again, an industrial policy. If you can't own up to such a socialist concept, all you'll get will be haphazard results, benefitting those that do have consistent policies and the infrastructure that goes with it, who will be able to take advantage of semi-random bursts of public support dictated by urgency or short term political grandstanding rather than properly designed.

So, if you want large-scale renewable energy investment, you have to accept the reality of the market today (ie it is dominated by European companies, with the Chinese pushing in), and put in place the policies that will make it attractive to invest in the US for the long term.

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In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Nov 9th, 2009 at 07:51:41 AM EST
Great diary - putting a case that even people with little understanding of the economics of wind power can understand.  Of course it is socialist to plan for the development of a Government regulated wind industry.  God made wind variable for a reason.  Only socialists plan for a windy day tomorrow!

notes from no w here
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Mon Nov 9th, 2009 at 08:52:39 AM EST
[ Parent ]
We don't do "policy" anymore in the US.  Didn't you get the memo?
by paving on Mon Nov 9th, 2009 at 01:56:32 PM EST
excellently written diary, the points are irrefutable, the evidence clear.

it's also a bit like daddy saying to the kids, 'look what you've done to your bed, whining about it won't change the mess you've made'

congress' jerking around the trust of the nascent businesses working to meet the huge need and opportunity is so irresponsible as to boggle the mind.

to set them up to fail, three times is beyond perverse, it's evil.

the message is clear, risk capital in that field, and we'll cut you off at the knees before you even can build up any momentum!

in that climate of myopic idiocy, to even use the word policy borders on absurd. you couldn't design a more effective anti- policy if you tried.

they whinge because the egg on their faces is embarrassing, i reckon.

here in costa rica electricity is subsidised by the government, so its cheapness has stopped people using solar panels, for example, either thermal water, or PV.

i rea that 95% of energy here is from renewables, but i think that includes a lot of hydroelectric.

the force, volumes and quantity of the rivers here is impressive, to put it mildly.

the challenge will be to build reservoirs to catch all the rainwater and save it for the long and lengthening dry season. the best living conditions are 100m up in the hills above the coast, and their steepness makes the concept of water storage on a scale big enough to cope with 10 month dry seasons, is daunting.

10 years ago there was only cart and horse transport here, as services expand, many will come to swell costa rica's population and enjoy its superior quality of life, if they can crack the water conundrum.

enough pours from the sky still, though this rainy season has been improvident, (some say because of el nino, others demur), but mostly carries topsoil off into the ocean.

community reservoirs, lake sized? wells every 50 metres? perhaps offshore-windpowered? the winds are brisk but don't seem as strong or constant as the trades in hawaii were. that could be different a few miles from here too. solar desalination?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Nov 9th, 2009 at 04:28:36 PM EST
You cannot have the creation of large scale manufacturing employment without, again, an industrial policy.

This is, of course, an incomplete prescription. The USA must have an appropriate industrial policy, one that is specifically tailored to encourage wind power. The fact is that the USA does have several industrial policies that, at least partially, coordinate:

  1. We have a de-industrialization policy that is written into trade agreements and into subsidies given to financial corporations that favor the dismantling of high wage manufacturing industries and shipping the manufacturing operation and jobs to low wage countries. Minimizing the number of high wage jobs in the USA minimizes the "leakage" of money into wages for the bottom 95% and makes that money available for the top few percent.

  2. We have a legacy fossil fuel energy policy that is fiercely defended by a sizable Congressional Contingent and that can afford to be a significant player in the campaign finance "pick your pimp" pageants that we in the USA call elections.  Thorstein Veblin noted, in Absentee Ownership and Business Enterprise (1923), that efficiency of industry is only a part of generating a profit and that the income of an owner is more highly determined by the overall damage, or sabotage, that he can inflict on the industrial process at large. (Capital as Power Nitzan and Bichler, 2009, p 219 and following.) The on again, off again nature of PTC subsidies and the difficulty of obtaining appropriate feed in rates for wind energy are cases in point of the infliction of such damage. (Microsoft's treatment of potential rivals, including IBM, Netscape, etc., is another example of such damage or sabotage.) The fossil fuel industry would like to sell the last barrel of oil and hundred cubic feet of natural gas at the highest possible price and allowing policies favorable to competitors does not favor that. If competitive energy sources are developed, the fossil fuel industry wants to own them so that it can control the timing of their introduction so as maximize their profits.

  3. The US industrial policy is to allow industrial policy to be determined by struggle and cooperation between the strongest corporate interests, the vector sum of which end up being enacted into legislation and/or agency policy. The fluctuating outcome of that power process is, de facto, THE NATIONAL INTEREST. Other players, for instance NGOs such as The Sierra Club, can affect things at the margin but remain powerless to change the nature of the system. Individuals in the bottom 95% are, if lucky, sheep to be shorn by this system, if unlucky, lambs to be slaughtered.  But every two years they are privileged to cast their vote for which of two preselected pimps they wish to "represent" them to the corporate interests in Congress. They can always take solace in the thought "I don't have to pay for THAT!" The corporations are only too happy to pick up that tab and, in fact, wouldn't have it any other way. Public campaign finance would be Socialism.  It would be the end of "The American Way of Life!"  


"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Nov 9th, 2009 at 08:55:02 PM EST
Capital as Power Nitzan and Bichler, 2009, p 219 and following.)

I got to listen to Nitzan at a conference last weekend in Massachusetts.  It's an interesting approach.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Nov 10th, 2009 at 12:57:49 PM EST
[ Parent ]
I found the book most illuminating and highly recommend it if you have not already read it. I do not know how he self describes his work in the stream of political economy but I would characterize him as "Post-Marxist".  The central thesis of the book is stated in the title and he develops that thesis in a manner that provides an examination of and contrast between "mainstream economics" and the Marxist tradition that is very helpful. The real value of the book is his illumination of the missing parts of both traditions, which, interestingly, have to do with the artificial separation of economics and politics into separate realms, and his real accomplishment is to show just how confounding that separation has been and how illuminating a reuniting of the two areas can be.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Nov 10th, 2009 at 02:20:36 PM EST
[ Parent ]
The real value of the book is his illumination of the missing parts of both traditions, which, interestingly, have to do with the artificial separation of economics and politics into separate realms ...

A systemic problem with Categorical Thinking.  Elements outside a Category are judged further apart than elements within a Category thus the affective influence of "politics" on "economics," and visa versa to be sure, are down rated.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sat Nov 14th, 2009 at 10:47:33 AM EST
[ Parent ]
... and it may be that low after 30 years of Raygun-nomics, the split between manufacturing and other employment is 60:40, and 85% of wind turbines bought with the stimulus are imported, because after the latest tax subsidy there is little excess US manufacturing capacity ...

... then assuming that the field is no more labor intensive per dollar than the US economy as a whole (I think that's a safe assumption), and assuming that the wind turbines will deliver power with greater value than their installed cost, then the job creation overseas (China, y'all, wherever) is:

85%x60% = 51%

15%x60% + 40% + (>50%) = >99%

So not allowing the stimulus money to be spent on projects where the wind turbines are imported is killing off 2 American jobs for each one job overseas that is avoided.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Tue Nov 10th, 2009 at 12:54:22 PM EST
And in any case, the purpose of promoting renewable energy is to reduce fossil fuel consumption and carbon emissions, this is a good on its own even if there were no jobs associated. Job are "just" an additional advantage and should not be the sole or even the first purpose of such investment.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Nov 10th, 2009 at 04:35:05 PM EST
[ Parent ]
That's easier to say if you live in a country without such a politically strong oil industry - if we are going to succeed in gaining these policies in the United States, we are going to need to have people in our coalition for whom the sustainable jobs, as opposed to here-today, gone-tomorrow jobs of an obsolete energy economy, are the first priority.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Nov 10th, 2009 at 05:49:45 PM EST
[ Parent ]
Oh, I wish I had the time to write more here.

There's a lot I agree with, and some nitpicking that I'd like to do.

In defense of Bob Oak, I think that a great deal of the outrage is less at the fact that that money is headed overseas, than that there is a lack of an effective industrial policy to integrate expertise from overseas to build American industry.  Basically, he's pissed that there isn't an industrial policy here......  

Which means that in large part, you two are in agreement.

For me, I'm far less worried about European investment, Vestas, Gamesa, etc.... then the very clear threat from the Chinese.  Vestas and Gamesa have made committments to local content in North America.  A-power and the Chinese startups haven't.

I'm researching the Basque renewable energy cluster right now, and it's clear that industrial policy was a huge part of it. Eventually this is to be my dissertation.

Local content requirement allowed Gamesa to emerge from under the shadow of Vestas, and create a Spanish wind energy base.

This was done through protecting the domestic market for Spanish produced turbines, and only once this base was built beginning the process of internationalization.  

Ok, let's shift that to the side, and talk about China.

It's clear that the Chinese have an industrial policy in place to not only protect their local market but to monopolize control over the raw materials (95% of rare earth minerals used to make the permanent magnets used in wind turbines are mined in China. The other 5% is largely in Australia, and much of that is under the control of China non-Ferrous, as when they bought Lynas.) It's not just wind turbines, it's everything that has rare earth magnets in it.

The Chinese have placed export quotas on the minerals themselves and the magnets.  They are using their control over these to fuel a strategy of vertical consolidation.  They want to create (and have at least for periods) differential internal and external prices for these products.  And that creates a huge advantage in terms of centering production in China.

Since US government funds are going to purchase several hundred turbines from A-Power produced in China, helping to fuel this strategy of vertical consolidation, there is a reason for outrage.

It's this very specific case with China that is the problem.  And if it's allowed to proceed, the Chinese will make sure that they only components of the full wind turbine that are produced in the United States are low value added, e.g. outside the nacelle, the towers and the blades.

That is a reason for concern.

You agree that local content requirements are a good industrial policy, but it has to account for value added, so that you have the local content in the nacelle, not just the blades and towers........

So much more I could say, not enough time....  Maybe after the semester wraps up.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Nov 10th, 2009 at 01:17:50 PM EST
If the USA is to respond to Chinese "neo-mercantilism" or allegations of dumping or in any way, it would seem that much of that response should be focused on their wind energy products.  Kill two birds with one stone. Give an incentive to China to revalue their currency and revise their "neo-mercantilism" and reward European countries that have invested in US based factories.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Nov 10th, 2009 at 02:27:54 PM EST
[ Parent ]
... the oil companies taking advantage of an unreflective, poorly thought out populism to attack the very policies which would do the most good in laying the foundations for investment in US manufacturing in wind turbines and other equipment to harvest sustainable, renewable energy resources.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Tue Nov 10th, 2009 at 05:52:11 PM EST
[ Parent ]
Before i wade into this discussion, one analysis i can provide for background is a salient discussion of what is behind A-Power.  I write this in full agreement with MfM's worry about the "very clear threat" from China (meaning Chinese turbine manufacturers.)

China does indeed have an industrial policy designed to jump-start the Chinese industry.  To qualify for any government program in China, the turbines must be 70% sourced in China.  This has led to a huge business in technical licensing of designs from established European shops. The only other pathway for western firms to enter the market is to form joint ventures with Chinese firms, or to actually establish subsidiaries, like Vestas, Nordex, GE, and Gamesa.

Virtually all of the European design shops have license arrangements with Chinese companies, as well as some manufacturers like REpower. The licenses themselves run the gamut in quality, including designs from the top shops like aerodyn, to very poor shops whose sole interest is royalties.

Background to this analysis is that such industrial policy is known to the Chinese to be fraught with potential failure for many firms. The Chinese wind industry has exploded so quickly that in general the performance level of the equipment is very poor. We have been told by officials that they expect up to 90% of the firms to fail, but that is the method to create a competitive industry globally.

A-Power existed as a near consulting firm, with a controversial background. They acquired the license for this turbine from a 3rd tier German manufacturer, Fuhrländer, who had little real success in Europe, but had great licensing success in Germany.

In fact, Fuhrländer provided the licenses for China's largest manufacturer, Sinovel, even though they could barely sell the turbine in Europe.  Before these licenses, Sinovel barely existed.

The German company acquired a further license for a 2.5MW turbine, but this time from a reputable design shop, W2E, made up of ex-Nordex designers. They've produced a few dozen of the turbines here in Europe, which i've analyzed and found excellent, at least as far as the design.

Instead of a further license with their partner Sinovel, for some reason  Fuhrländer sold the license to a firm with no prior manufacturing experience, and a shady past, A-Power.

A-Power's first turbines were completed this summer, and they are now in full production for both Cielo in Texas and the Chinese market. Production lines established before any testing is completed have a history of failure in the wind industry, and that's very possibly the case here.

Such failure would not reflect on the design from W2E, rather the QC at manufacturing level.

Strangely,  Fuhrländer has also licensed the technology to a start-up in the US, which was planning to establish manufacturing of the design in the US.  They will likely now be undercut by A-Power, a very queer decision by  Fuhrländer. At least two of these turbines are currently operating in the US, which i believe to have been manufactured in Europe.


"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Tue Nov 10th, 2009 at 03:24:04 PM EST
[ Parent ]
Sooo much good information here.  Of which I had little idea.....  So happy that you wrote this here.

Do you have any good sources of info about the A-Power story?  There's been a spate of stories written in the popular media in the US, but none have framed it in terms of industrial policy.  I've been wanting to explore this case with China further.  It seems that a really good article could be written in this vein, making the story understandable for a broad audience outside of academia.

Thanks for the comment.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Tue Nov 10th, 2009 at 03:44:59 PM EST
[ Parent ]
There's not a lot of verifiable info on A-Power, much of what i've learned is through direct contacts with analysts.  I've been told that the father of A-Power's president is in jail in the US for securities fraud, which analysts claim to have verified, but i haven't.

What's most important to me is that industry history makes it unlikely that the turbine will be successful, despite its pedigreed design. The turbine has been undergoing testing in Germany since 2008, and there are several dozen installed this year in Europe. i was impressed when i visited three of them, after two days with the design team.

Chinese turbines' capacity factor is far lower than standards here, and that's for the best machines. it will take a minimum of 3-5 years before European quality begins to be reached, and likely longer.

Here's the turbine on the highest tower in the world, 160m.

What's even weirder about the story is that A-Power's license is upgraded from the somewhat tested 2.5 design to the untested 2.7MW version.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Tue Nov 10th, 2009 at 05:31:41 PM EST
[ Parent ]
I'd note that rare earth help make better magnets but it is possible to build wind turbines without them if need be. The main loss is one of weight, and maybe a few % of net generation.

Maybe CH can comment more on that.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Tue Nov 10th, 2009 at 04:37:28 PM EST
[ Parent ]
It's true the prime advantage is weight, particularly with the bulky and heavy low speed generators for gearless turbines (and to a lesser degree hybrid turbines with a one or two stage gearbox.) net energy loss at this point is minor, perhaps less than a percent.

Saving weight is about lessening loads on rotating equipment, and lighter generators help.  perm mag gens when properly designed likely decrease downtime and mtbf.

There are likely to be other sources of rare earths down the road, but that's just speculation on my part.

"Life shrinks or expands in proportion to one's courage." - Ana´s Nin

by Crazy Horse on Tue Nov 10th, 2009 at 05:09:48 PM EST
[ Parent ]
There are other sources of rare earths but capital is required to develop them.  Unless they are given an assurance of a market price adequate to service the debt they can't be developed. Likely only a sovereign govt. could provide such assurances, as the venture would be vulnerable to being sabotaged by the Chinese simply by selling rare earths at prices below the cost of production for the new mine. And a government guarantee would be labeled "Socialism!" We are hoist on the petard of our own economic ideology.

The USA could easily this problem by negotiating an agreement with China that either gets an agreement on the minimum prices at which China will sell rare earths or agreement to sell rare earths to the USA at the same price they are sold to Chinese companies and making access to the US export market contingent on that agreement. But that would be serving the national interest of the USA but not the corporate interests of the energy companies and the financial services companies involved in importing manufactured goods from China.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 11th, 2009 at 12:42:38 AM EST
[ Parent ]
Well, one could leave this to the market as well. If the Chinese block all exports the price will go up and capital will be available outside China. Sure, there is always a risk that China undercuts the price ot threatens to do so, but that doesn't make much sense as China isn't interested in exporting these minerals. That's the problem.

I'm also sure new miners could reach long time fixed price supply deals with the large consumers of rare earth minerals, which are crucial not mainly for wind power but for hitech armaments.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Wed Nov 11th, 2009 at 02:52:09 AM EST
[ Parent ]
rare earth minerals...are crucial not mainly for wind power but for hitech armaments.

Well, I knew that iridium is often used as a "flashing" over metal parts used in electronics, as I used to purchase rotary switches with iridium flashings for audio console applications, and iridium is a rare earth, the one whose deposition at the boundary of the Cretaceous marked the extinction of the dinosaurs, of which my console was one.  :-)

If they are important primarily to hitech armaments the production could be guaranteed by the US Government, but commercial products would still cost more than alternate products made with Chinese raw materials, not to mention virtually free labor. Plus any commercial use of "strategic" materials would involve the user with bureaucratic requirements, etc.

Others could better judge the likelihood of investments for rare earth mines being funded absent guarantees, but I would favor slapping an ~ 20% tariff on ANY product containing embargoed "strategic" materials. And while we are at it, phase in tariffs to cover the cost of providing health care and retirement benefits to Chinese workers. Were China to respond by dumping $US they would be hurting themselves and the Fed is already involved in massive QE anyway.  What does another $2-3 trillion matter. It is fiat money anyway. Deal with consequences with new fiats.  :-)

The US would have to pay more for domestically manufactured consumer goods but would have a vastly improved national accounts balance. The ones hurt would include those who bet on the "manufacture everything in China" strategy. All of the "Free Trade" "Globalization" bull shit has mostly been propaganda in the service of the financial sector.  Time for an Industrial Policy worthy of the name that serves the interests of the average US citizen instead of the existing de-industrialization policy that serves the interests of a parasitical financial sector.  

Chop! Chop!      USA!  USA!  USA!

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Nov 11th, 2009 at 08:58:21 AM EST
[ Parent ]
No, iridium is one of the platinum metals (along with osmium and platinum) but it is certainly rarely occuring.
by njh on Sat Nov 14th, 2009 at 08:56:27 PM EST
[ Parent ]
I know that you're right.  It's the role that a marginal price and performance advantage coupled with massive wage arbitrage can play in leading the value added part of the industry (aka the stuff inside the nacelle) to cluster somewhere in China.  

That said, in terms of access to resources as a technological, rather than price, restraint, the problem is undoubtedly far larger for hybrid and electric vehicles.  I see huge problems there, simply in the quantities required for large scale production of hybrids.  Total 2008 production in China was  25,000 tons for neodymium and 31,000 for lanthanum.

Both are need to makes hybrids.

Each electric Prius motor requires 1 kilogram (2.2 lb) of neodymium, and each battery uses 10 to 15 kg (22-33 lb) of lanthanum. That number will nearly double under Toyota's plans to boost the car's fuel economy, he said.

Toyota plans to sell 100,000 Prius cars in the United States alone for 2009, and 180,000 next year. The company forecasts sales of 1 million units per year starting in 2010.

This means that if Toyota got the entirety of Chinese production it would be limited to around 23 million by the neodymium, but  the lanthanum would limit it to somewhere between 1.8-2.8 million vehicles annually. With wind turbines seeking these same minerals, that is going to create an issue.  At least in the short term, monopoly control over these minerals (at a level that OPEC could only dream of) could allow them to pursue a policy that made it nearly impossible for "green energy" industries to be developed, or sustained, in Europe and the US.

Plus, the question of whether it's hybrid cars or wind turbines that suck up that supply of rare earths is going to have to be answered.  Looking at these difficulties, I'm more and more enamored of the potential of using ammonia as an ertzatz hydrogen carrier, produced through electrolysis, to fuel vehicles.  Which means that thew turbines get the rare earth's, but if we are looking at this in strictly market terms, it's likely that the cars win.........

Ugh....  

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Wed Nov 11th, 2009 at 04:02:47 PM EST
[ Parent ]
re ammonia and stored windpower, are you aware of stranded winds visionary diaries here and at dkos?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Thu Nov 19th, 2009 at 08:24:53 AM EST
[ Parent ]
Is anyone going to be at the EREC conference next week? I will.

Thanks for the diary, J. At the end of the day, if Green Stimulus money saves dollars going abroad in another form, why all the fuss...

Rien n'est gratuit en ce bas monde. Tout s'expie, le bien comme le mal, se paie tot ou tard. Le bien c'est beaucoup plus cher, forcement. Celine

by UnEstranAvecVueSurMer (holopherne ahem gmail) on Wed Nov 11th, 2009 at 04:45:13 AM EST


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