A common feature in some magazines (not this one) is the matching game, in which readers are invited to match celebrities’ faces to their abs, or their favorite rehab facilities, or even their movies or songs. This game came to mind as I was poring over Al Gore’s green-tech portfolio: If one were so inclined, one could play a nerdy but revealing version of the matching game by pairing the companies in which Gore invests with the millions or billions of dollars they would receive under the Democrats’ energy legislation.
That legislation, which passed the House last year, has stalled in the Senate because of its controversial restrictions on the use of fossil fuels — a system of emissions limits and tradable permits known as “cap-and-trade.” But cap-and-trade isn’t the whole program; billions of dollars in green subsidies are also packed into the legislation. So now the Democrats are considering Plan B: drop cap-and-trade, pass the rest of the bill, and declare victory. It wouldn’t be the kind of victory that hardcore environmentalists want, and would confer only negligible benefits upon the environment, but it would make Gore and his venture-capitalist friends a lot richer — and taxpayers poorer.
Only a small part of Gore’s investment portfolio is tied to cap-and-trade. Most of the companies in which he invests would benefit from the other parts of the Democrats’ energy bill — the parts that would be much easier for Congress to pass. Congress has been subsidizing green programs for decades, and that support increased dramatically with the 2005 energy bill. But the Democrats want to pump it up still more, even though the consensus for dramatic action on climate change is buckling like a shoddy roof in a blizzard of scientific scandals. The U.S. government, facing record-setting deficits and debt, cannot afford new subsidies. Yet with “green jobs” as their rallying cry, Gore and other advocates for more green-tech largesse will push to pick the taxpayers’ pockets — lining their own all the while.
Let’s play the matching game. Gore is a partner at venture-capital firm Kleiner Perkins Caufield & Byers, which has investments in a handful of green-tech firms poised to make bank if something like the House’s Waxman-Markey bill, named for Reps. Henry Waxman (D., Calif.) and Ed Markey (D., Mass.), becomes law. For example, Altarock Energy, a firm specializing in geothermal power, would be eligible for loans at below-market rates through the Clean Energy Manufacturing Loan Program. So would Bloom Energy, a company that makes solid oxide fuel cells; Ausra, which concentrates on solar power; and Harvest Power, which markets technologies that turn garbage into biogas. These companies would also qualify for a massive piece of the Residential Energy Efficiency Block Grant Program, which would provide $2.5 billion to state and local governments to promote the use of renewable energy, including solar, biomass, and geothermal, in single-family and multifamily housing.
Then there are the ethanol makers, Mascoma Corporation and Amyris Biotechnologies among them. Corn ethanol lost some of its political attractiveness in the wake of 2008’s food-price spikes, but the government’s failure for 30 years running to popularize this spotty fuel hasn’t daunted its champions in Washington. Ethanol boosters have transitioned smoothly from corn to cellulosic ethanol, which is derived from non-food sources such as switchgrass and wood chips. One of the biggest problems with cellulosic ethanol is that breaking down such fibrous matter requires costly processes and chemicals — and that’s where Mascoma and Amyris come in. The Waxman-Markey bill contains mandates and loan guarantees that would help the producers of cellulosic ethanol buy the products they sell.
Another of Kleiner Perkins’s investments, its stake in Silver Spring Networks, is already paying off thanks to the stimulus bill President Obama signed last year. That bill contained billions of dollars in grants to spur improvements of the nation’s energy grid, with the goal of converting it into a “smart grid” that helps utilities more accurately gauge electricity use. Silver Spring provides software and services to implement smart-grid improvements, and its client utilities have already scored more than $500 million in grants, thanks to the stimulus. Under Waxman-Markey, Silver Spring would fare even better: The bill has an entire subtitle dedicated to smart-grid development, and billions of dollars in subsidies to fund it.