Take a deep breath, because what I’m about to tell you may be shocking: Federal loan guarantees for energy projects have been successful, cost-effective investments—contrary to what some conservatives insist is the case. Don't take my word for it. That’s the message from Herb Allison
, former national finance chairman for Sen. John McCain (R-AZ), who led a team of accountants and auditors in conducting an independent analysis of the Department of Energy’s Loan Guarantee Program.
Allison and his team found that, despite the hysteria around the now-bankrupt solar-panel maker Solyndra LLC, this program will cost $2 billion less than initially expected. When the Department of Energy first issued these guarantees starting in 2009, they expected that they would cost the government more than $5 billion. At their most recent internal analysis in 2011, DOE concluded that the loans were performing better than expected, and that they would not cost less than $3 billion. Now, Allison and his team of independent consultants find that even DOE’s most recent projections were too high, and that the guarantees would only cost $2.7 billion.
To put that in perspective, the fossil-fuel industry got a whopping $70 billion
in government subsidies from 2002 to 2008. Many of these subsidies have been in place for nearly 100 years. The nuclear industry, too, has benefited from billions of dollars in subsidies, including loan guarantees, over the last half-century.