The commonwealth says it will seek to recover public subsidies from Aquion Energy Inc., the Bill Gates-backed Pittsburgh battery maker that has filed for Chapter 11 bankruptcy protection.
The company, which calls Pittsburgh home and has a manufacturing facility at the old — and cursed? — Sony complex in Westmoreland County, made saltwater-based batteries touted for their “sustainability” and safety.
But the company cited the “expensive” nature of its venture and its inability to raise the kind of private investment to sustain the operation, which began life at Carnegie Mellon University.
Ironically, the day before Aquion’s failure was announced, founder Jay Whitacre was named executive director of CMU’s Institute of Innovation.
Aquion received more than $13 million in public “incentives” to locate in East Huntingdon.
“What a joke,” notes Jake Haulk, president of the Allegheny Institute for Public Policy. “How much money the government wastes pandering to this stuff instead of allowing more tax deductions for research and development spending so private companies can spend their own money.
“Can you say tilting at windmills?,” added Haulk, a Ph.D. economist.
The Times of Beaver County reports that the Pennsylvania Turnpike Commission will adopt cashless tolling next month along parts of Interstate 376 in Beaver and Lawrence counties.
But it says no toll takers will lose their jobs; they’ll be “absorbed” elsewhere into the system, based on seniority.
An “efficiency” is not an “efficiency” if it goes out of its way to neutralize what should be a resulting efficiency.
Ergo, “government efficiency” remains an oxymoron.
Uh-oh. An Associated Press dispatch suggests that GOP lawmakers in Harrisburg have a newfound “willingness to increase taxes to deal with the state’s persistent post-recession deficit.”
That suggests that those legislating along the banks of the Susquehanna River are incredibly out of touch — with good fiscal stewardship, with fundamental economics and with the will of the electorate that increased Republican majorities in the state House and Senate in the last election.
Pennsylvania faces critical fiscal challenges. And it’s certainly not because state government taxes and spends too little. It’s because taxes are too high, government spends too much and over-regulates just about everything.
Indeed, there likely will be great ancillary effects from Shell’s forthcoming “cracker” plant in Beaver County’s Potter Township. It will use shale gas “feedstock” from the region to make one of the building blocks of plastics.
But if it is the be-all and end-all project it’s touted as being, why are any of the spin-off industries associated with the already heavily “incentivized” cracker facility (with taxpayer dollars) also being subsidized by the public purse?
To wit, Bidell Gas Compression, a subsidiary of Total Energy Services Inc. of Canada, says it will base its first U.S. manufacturing operation in nearby Weirton, W.Va.
According to AreaDevelopment.com, Biddell will “repurpose a 100,000 square-foot decommissioned machine shop to fabricate, sell, lease and service natural gas compression equipment to customers operating throughout North America and internationally.”
About 60 jobs will be created initially, with up to 130 jobs by 2019, said West Virginia Gov. Jim Justice.
But not only did “The State” help Bidell buy its physical plant, there’s state tax dollars to train workers for the facility. And Hancock County and the City of Weirton, among other entities, “also provided financial aid and technical support to secure Bidell in West Virginia’s Northern Panhandle,” the report notes.
Again, if Shell’s already heavily subsidized cracker plant is such a magnet for ancillary investment down the supply and support chain, “priming the pump” for other investment, why are taxpayers yet again being turned into venture capitalists?
Total Energy Services had consolidated revenue of $57.4 million in the fourth quarter of 2016, a 10 percent increase over 2015’s fourth quarter, Total Energy’s Yuliya Gorbach, the company’s vice president and chief financial officer, reported in a March 8 investor conference call.
Seventy-three percent of that revenue came from its compression and processing business.
Why should any public money be expended to underwrite this or any company’s capital expansion costs?
Colin McNickle is a senior fellow and media specialist at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
