An alternative energy company that received a government-guaranteed loan from the Department of Energy has filed for bankruptcy, just two days after being name-checked by the president in the State of the Union address.
President Obama is used to wiping egg off his face when it comes to bad energy investments with taxpayer dollars — that’s why you’d think if he was planning to reference a specific energy company in a big speech, his staff would have at least made a phone call to see if it was about to go bankrupt. Apparently they never made the call, because that is exactly what just happened with Ener1, Inc.
On Tuesday, President Obama gave his annual State of the Union address to a joint session of Congress, in which he opined, “government support is critical in helping businesses get new energy ideas off the ground.”
Throughout the speech, the president made repeatedly referred to the huge number of industries and companies he has given subsidies, loan guarantees, and tax credits. (The Daily Show’s Jon Stewart mocked his “goody bag” rhetoric, saying, “Obama is tax credit Oprah! You get a tax credit, and you get a tax credit! Everybody gets a tax credit!“)
But at the beginning of his section on clean energy, Obama said, “In three years, our partnership with the private sector has already positioned America to be the world’s leading manufacturer of high-tech batteries,” a clear reference to a $118 million stimulus grant to develop electric-car batteries awarded to EnerDel, a subsidiary of Ener1, Inc.
On Thursday, Ener1 filed for bankruptcy, seeking Chapter 11 protection, though company officials maintain that production would continue throughout the bankruptcy proceedings. Businessweek reports:
The company listed assets of $73.9 million and debt of $90.5 million as of Dec. 31 in Chapter 11 papers filed today in U.S. Bankruptcy Court in Manhattan…
Ener1, based in New York, makes lithium-ion batteries for plug-in electric cars, which were scrutinized by federal auto-safety officials after a General Motors Co. Chevrolet Volt caught fire, people familiar with the probe said in November. A two-month federal safety investigation cleared the Volt of danger, and GM is beginning a marketing effort to tout the car as safe and innovative.
Under President Barack Obama’s economic stimulus package, the Energy Department awarded grants in an attempt to create a U.S. electric-car industry. Ener1’s EnerDel unit, based in Indianapolis, was the grant recipient and has received about $55 million of its grant so far.
This isn’t the first time President Obama has bragged in a major speech about a “successful” alternative energy investment in a company that soon went under. In his 2010 State of the Union, the president took credit for creating a thousand jobs at the now-defunct solar panel manufacturer Solyndra, which received a $535 million loan guarantee from the DoE, pushed through by the White House.
Solyndra went bankrupt in September of last year, leaving taxpayers holding the tab for its loans. Another heavily subsidized energy company, Beacon Power, also filed for bankruptcy last October, leaving taxpayers on the hook for about $40 million in government guaranteed debt.