Haynes and Boone's Newsroom

Paul Dickerson Co-Authors The Deal article, "The Clear Alternative"
05/06/2009

By Craig Cogut, Pegasus Capital, and Paul Dickerson, Haynes and Boone

The worlds of policy, finance and science have combined to form a promising platform for the development of much-needed technologies that will provide sustainable and clean energy for decades to come. In times of strong economic growth, the oxygen of this economic system -- capital -- flows freely to good ideas, ensuring we stay on course to head off our energy and environmental challenges.

The hard economic times we are now facing have threatened that system, constricting capital and leaving us two steps back in addressing our critical needs. Each week brings news of another clean technology company shelving its expansion plans or shutting down altogether for lack of financing.

The shame of it is the money is there. Over the past three-and-a-half years, Congress authorized the Department of Energy to guarantee a combined $42 billion worth of loans to companies developing technologies that help avoid, reduce or sequester harmful air pollutants like carbon dioxide. This funding, which excludes another $6 billion from the economic stimulus, would deliver immediate, meaningful relief to companies trying to expand and deploy their technologies into the marketplace. But it has been 42 months since the initial funding was approved, and only now are the first checks getting signed.

As Energy Secretary Steven Chu has indicated, a tangled web of red tape is responsible for the holdup, and that blame should not be assigned to the DOE's loan guarantee office. Chu has vowed to slash through the red tape and speed up the approval process, but we must face the reality of a backlog of financing requests so great that the flow of funds will likely amount to little more than a trickle.

Article excerpted from The Deal. For full text, click here.