Public officials might be well advised to steer clear of controversy, but when it comes to energy storage startup EEStor, its investor Zenn Motor — and the companies’ bold claims about the disruptive potential of EEStor’s ultracapacitor technology — a couple of Congressmen are plowing right ahead.
Representatives John Carter of Texas and Mark Schauer of Michigan, who have lent their support to EEStor and Zenn in recent months, are the latest example of how some politicians have rushed to align themselves with clean energy ventures whether or not the technology and business models are proven. California Governor Arnold Schwarzenegger hailed solar thermal startup Ausra as “one of the best companies in the world,” for example, before the startup laid off staff and was forced to dramatically scale back its ambitions. The trick to currying this favor? Promising to create green jobs.
Rep. Schauer, as we noted this week, has written to the Department of Energy supporting Zenn’s bid for government aid in building a facility in Michigan to work on commercializing electric vehicles with EEStor’s devices. And Rep. Carter, after touring EEStor’s headquarters this summer, said, “It’s exciting that we have a Central Texas company this close to revolutionizing transportation as we know it in America,” in a statement sent to the Barium Titanate blog. According to the statement, he’d seen energy storage technology at the facility that “can dramatically change” the auto industry and economy as a whole when deployed at mass scale.
We should note that the Barium Titanate blog is run anonymously by someone who says they have a “small speculative investment” in Zenn Motor, and we’ve reached out to Carter’s office for confirmation of the report (we’ll update when we hear back). Seeing any solid evidence of EEStor’s claim would put Carter in a pretty unique position.
Toronto-based investment bank and research firm Jacob Securities, which visited EEStor’s facility around the same time that Carter did (if not on the same tour), came away with a somewhat more skeptical assessment. “After all,” the analysts write in a report released to investors this week (PDF), “no one has seen a commercial prototype. We certainly didn’t.”
Carter and Schauer’s support for EEStor and Zenn’s work makes sense in that, if the companies can actually deliver on their claims, it could bring jobs and business to their Congressional districts. But the danger with this kind of early promotion is that political support for unproven technologies can have consequences long after hope for a technology has proven to be either false or simply unrealistic. In some cases overhyping a company that falls short can cause skepticism and distrust in an industry that could otherwise be quite promising.
That’s part of what we’re seeing unravel with biofuels now. As the Wall Street Journal noted in an extensive report last week, the U.S. government provided $3.25 billion in subsidies and other support for biofuels including ethanol in 2007 — more than the amount offered for any other energy source. The long list of problems with first-gen ethanol includes the fact that feedstocks divert land from food crops and may result in more greenhouse gas emissions over their total lifecycle than they prevent as an alternative to petroleum fuels — solid reasons for politicians to keep the corn ethanol industry at arm’s length. Yet as the WSJ’s Ann Davis and Russell Gold write, new stimulus funding is expected to increase government support for biofuels, including ethanol.
Avoiding all risky and unproven technologies, however, would mean simply preserving the status quo — not an appealing option when it comes to energy sources, technology and climate change. But why not call a spade a spade? That’s what the Department of Energy has done with its ARPA-E (Advanced Research Projects Agency-Energy) program, which is designed for “high-risk” and “transformational” energy technologies.
It was too early for anyone to really know if Ausra would become “one of the best companies in the world” when Schwarzenegger called it that, and in hindsight it was premature for Congress to invest billions of dollars boosting ethanol. Today it’s too early to know whether EEStor will clear the high hurdles on the way to, as Carter put it, “revolutionizing transportation as we know it in America.”