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On 60 Minutes and the cleantech / Vinod Khosla story

The above piece aired on 60 Minutes last night. It was part of an overall interesting show that profiled volcanoes, clean tech, and Kim Dotcom (who has 60 lush acres in New Zealand and thinks of himself as James Bond for some reason). Now, a lot has been made recently of 60 Minutes kind of losing their way in terms of journalism — there was the Benghazi story that had a lot of incorrect details, and then there was the NSA piece that seemed to be the definition of fluff (and drove Jon Miller back into the loving arms of the NYPD) — so there was some speculation that with its newer pieces, 60 Minutes had to hit hard and hit with facts. In that regard, clean tech seemed like a good feature to do — it’s an industry that probably a lot of people outside of Silicon Valley and/or the towns where some of these things are cropping up for jobs really don’t understand, so coming in with umbrella-level facts and a compelling narrative could be exactly what 60 Minutes needed. There is no one better to do that type of story than Lesley Stahl. I am still getting over her Taylor Swift fandom when she profiled the singer.

Anyway — back to clean tech. (I realize it should be one word, but I’m all about breaking convention.) The story focused on a couple of angles, as you can see in the video above — essentially, it started by talking about Kior, which seems to be able to turn wood chips into gasoline in 30 minutes (as opposed to the millions of years it would take gasoline to form naturally). The report made it all seem really simple, and that adoption of the technology has been slow. That’s not completely true, but more on that in a second. Then the piece shifted to talking about all the failures involved in clean tech as relates to taxpayer money — people essentially being paid to sit around and do nothing, etc. The bow on the narrative was strung with “OMG, China is coming in and buying all our tech on the cheap even though it was developed with U.S. taxpayer money!!!” Those were essentially the three acts.

There are a couple of good summaries/takedowns of the piece online today. Let’s go through the three acts and talk a little about each section, shall we?

On Kior, there’s this from Gigaom:

The piece had a very, very light touch on Kior. The company’s stumbles are far bigger than explained in the story, from missing its volume production goals, to having a stock hovering between $1.50 and $2, down from an IPO price of $15 per share, to having a law suit from investors. Yes, it’s possible that they’ll pull through and meet expectations, but more likely is that they won’t. That’s just the realities of the difficult business.

This brings up an interesting element of the piece, also reflected here:

The main guy behind Kior — and one of the main evangelists of clean tech in Silicon Valley, it would appear — is Vinod Khosla. He has a net worth of about $1.3 billion, which is approximately 1500 times the amount of money most Americans will even see in their lifetime. Yet every time he does an interview, he loves to talk about how much he fails. That’s a very noble discussion at some level — people need to understand the importance of failure, especially young people in today’s world, who maybe didn’t see it enough as their parents earned well in the boom 1980s — but when you mix it into the 60 Minutes reporting, it was weird. It was almost like 60 Minutes was trying to tell two stories: one about Silicon Valley and the culture of success there, and then one about clean tech. They didn’t often overlap properly. The description of the piece on CBS’ website was “Despite billions invested by the government in so-called clean tech energy, Washington and Silicon Valley have little to show for it.” Quoting gigaom:

Um, does that include the huge gains in wind farms and solar panel projects in the U.S., or does that just mean that Solyndra didn’t work out? Because, Solyndra happened in the summer of 2011; two and a half years ago. The underlying problem is that “cleantech” is a convoluted term that can mean many things, and isn’t all that helpful as an organizing group. Let’s figure out in 2014 if we should kill that term or not.

So maybe the issue is semantics. But let’s talk more broadly about the industry. There’s this, from Think Progress:

It’s true there have been some losers among cleantech companies, but that’s precisely what you would expect in an industry where the norm has become ruthless cost-cutting, which in turn is a great boon to consumers.

The Department of Energy Loan Guarantee Program — essentially the thing that 60 Minutes was discussing — actually has a 97 percent success rate, which would be a huge deal in most fields. The thing is, the flops — i.e. Solyndra — are such big deals (and seem to showcase the ineptitude of the government, which everyone likes to spotlight) that everyone wants to focus on those.

This is important to remember with regards to clean tech and the Department of Energy as well:

The key point is that the goal of DOE’s investments is not to make money. The goal is to accelerate the drop in price — and increase in deployment — of clean energy in the market, which it clearly has done in industry after industry. A secondary goal was to create jobs in this country, which it also succeeded in doing.

It almost seems like there’s two stories here — one is “The DOE and the government failed us and took our money!” which is (a) not entirely accurate and (b) if it was, would it surprise you tremendously? and then the second story is “Silicon Valley and venture capitalists are bailing out!” which is (a) probably true and (b) they’ll return in a second once the costs are low and the technology is there to start making real money (see: Tesla, which emerged from clean tech and was a top-five stock of 2013). The third storyline is about China swooping in and buying things, which (a) shouldn’t surprise anyone and (b) there are limitations to China running the world, so calm down.

Bottom line is: 60 Minutes went for a hatchet job and didn’t really do that; rather, their reporting was muddled and odd. More important bottom line is: clean tech is a tremendously important sector, because eventually we need to get off fossil fuels, even though it’ll probably take 1-2 generations dying off before that really happens. The money and interest seemingly isn’t there now, but in 1992 no one had any interest in buying random stuff via a computer, and look at that world now. We’ll get there. It just takes time.

Ted Bauer

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