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GE has entered onto AMSC turf:

General Electric Co (GE.N) reached a $3.2 billion cash deal to acquire a French maker of high-efficiency motors used in the oil and gas sector, pouring more money into its most profitable division.

The largest U.S. conglomerate said its acquisition of Converteam, which also makes equipment to connect renewable power sources such as wind turbines to the electric grid and which reported 2010 revenue of $1.5 billion, would boost its offering of equipment used across the energy industry.

For fun I decided to see what kind of income taxes AMSC paid over the last three years. It was a surprise to see it had paid in all three years, even when it had operating losses. Over three years, AMSC had operating income of $5.6 million yet had income tax expense of $32.1 million.

GE has income tax expense in two of the three years. When it had operating income of $11.1 billion in 2009, GE had an income tax expense credit of $1.2 billion! Over those three years GE had operating income of $115.2 billion yet showa income tax expense of $1.2 billion.

It must be a lot easier to make big purchases when the tax man isn't dipping deep into your pocket...

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"...It must be a lot easier to make big purchases when the tax man isn't dipping deep into your pocket...?

And easier still when the tax man is net putting money into your pocket. Listen to this report: absolutely shameful IMO!
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If you don't want to read a somewhat political post, please skip this one.

I just finished listening to President Obama's speech to a college audience about alternative energy and our energy needs. I got the points on energy and, in general, liked everything I heard. I did not get the negativity in his comments and questioned why there wasn't a plan or policy that tied our energy future together.

The President used the word "cynical" to sum-up how he thought many in the audience felt. He asked, "What is America capable of..." and stated "We need change..." and said he didn't want to leave the problems for other Presidents to solve. The speech left me feeling like we elected him President but he lack the power to perform that duty.

For some unknown reason the President didn't state an energy policy and, therefore, was not there to demand response from our representatives to enact such a policy. The speech sounded like a random set of thoughts on increased funding for a random set of projects.

I am not here to bash the President along political lines. President Bush was labeled as being "in the pocket of the energy industry" yet never delivered a clear energy policy. All I remember is that the VP holed-up with energy company leaders early in the first year and never ever seemed to be able to make a clear statement about energy policy for the entire eight years. When it came to identifying an energy issue and setting a timeline for action with funded programs, the Bush Administration was a failure. And, don't get me started on Clinton/Gore...

The Administration recently proposed a budget for next year. Where in the budget, and for how much, was each of today's initiatives funded? It would have taken very few words to have said this but it was not done. Who + doing what + for what goal + by when + at what funding level. Is that too much to say? Without that, even the random set of projects doesn't mean much.

I was confused about one thing. The President seemed to be "fighting" an enemy for funding. But, isn't the current (not next year's) budget the one being debated? Who is he battling now, with such a negative outlook, about future funding? For the cynical, they had plenty to cry about. Where was the upbeat message about what the President of the United States wants to accomplish?

When the President was in a position to take action, like the NRC review of nuclear reactors for the future, he didn't have a timeline for action or a short list of results he expected. How is anyone to know (and measure) what will happen when the very person in charge leaves it undefined and open ended? Even the ignored debt commission had a timeline and charter.

While I strongly support a clean energy future and a strong move away from oil, I think the Administration should start owning some of the failures and seek public support by candidly talking about future success. Here is what I wish the President had said:

"We should have had a separate bill two years ago to convert our 18-wheelers to natural gas. Trying to do too many things in the comprehensive Energy Bill was the wrong move. We would be on the road to reducing our foreign oil needs if we had made this one move. We need to do this today."

"And speaking of oil, we are producing so much of it that there is not enough pipeline capacity to move it to market. We need to fast-track the construction of a pipeline so we can get this to market."

"Wind power is cost effective in many places. In many cases it lacks the power grid and other infrastructure to get it to market -- just like the oil we have bottled-up. The Federal government needs to guarantee loans to utilities that so that this infrastructure can be built to encourage this power to come to market."

"We need to be making investments that use our leading edge technology and get it deployed in our country first so we can learn first how to use it and be first to bring the cost down so others can afford it. We are already building a superconductor-based switching hub for electric power that will handle 1/3 of our power. We need to get a second and third such hub under development so we can exploit this technology while bringing stability to our power grid."

"What has allowed Germany and China to be the world leaders in, respectively, wind and solar? They were willing to make an investment. I am opposed to Federal gifts. I am willing to do loan guarantees for up to 20-years that will reimburse utilities for producing alternative energy power. Regardless of the source (e.g., wave, wind, switch grass), the Federal government will set the minimum prices for electricity generation by source up to the name-plate capacity of a facility. That way capacity will be built that can be operated profitably regardless of market conditions. By making loans, we will encourage the companies to operate the plants efficiently over their lifetime."

What I heard today was a political speech. It was the same old bait with common sense and condemn using some unidentified group. I am tied of failed government. Congressional polls continually show there is the will in Congress to pass natural gas for 18-wheelers. Yet, it hasn't happened in the Bush or Obama years. It is time for our leader to identify the need, condemn the failure of his Administration and Congress to deliver, and propose to move ahead. I think that message would be powerful for both the President's reelection bid and the long-term energy needs of the US.

Sorry for the political bent but I cannot see how we can get around this in today's funding environment.

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After posting about the President's speech, I read a story from AP about the speech. I think a few comments are in order:

Seeking to show the public he understands the burden of rising gas prices, President Barack Obama set an ambitious goal of reducing U.S. oil imports by one-third by 2025, and vowed to break through the political gridlock that has stymied similar initiatives for decades.

That's correct. He set a date. But, like every President before, what is the plan and how does a President today guarantee something happens in 2025? I think common sense says that "goal" is just a reference point. Those looking for a roadmap to get there will be disappointed.

"That has to change. We cannot keep going from shock to trance on the issue of energy security, rushing to propose action when gas prices rise, then hitting the snooze button when they fall again," he said.

Here is one of those common sense statements that I mentioned. But, how are these words actionable? It's a word picture that, if you look at the last two years for action on 18-wheeler fuel use, describes the Administration and Congress. They hit the snooze button! It would be refreshing to hear common logic, and a few "we could do better" statements, for 2011 action items.

"So any claim that my administration is responsible for gas prices because we've shut down oil production might make for a useful political sound bite, but doesn't track with reality," Obama said.

What does this have to do about energy policy? I think if the President were to think this through he might call his statement a "political sound bite" too. This downbeat approach to energy issues was what bothered me about the President's speech. Be defensive and a cynic; skip the upbeat roadmap to inspire action.

Obama said a significant part of his plans to cut U.S. oil imports would depend on further increases in domestic production, and he pledged to develop new incentives for companies to speed up oil and gas production on current and future leases.

Yes, but what about the oil bottled-up on land in 2011 and not able to be piped to market? Note too this isn't a discussion of putting oil shale in play.

Obama called for the construction of four new advanced biofuel plants in the U.S. within the next two years.

Here is the best example of where details are missing. Are there already four plants already planned for 2012? My guess is yes but I could be wrong. If not, what is the President after? Is it $1.00 a gallon gasoline-like liquids? ...$4 a gallon? Note the lack of anything the common person could convert into a real-world meaning. If these plants are not already planned, what will cause four plants to jump out of the ground in two years? Will it take loan guarantees or will it take outright gifts?

The president also ordered government agencies to ensure that by 2015, all new vehicles they purchase are alternative-fuel vehicles, including hybrid and electric. Obama has previously set a goal of putting 1 million electric vehicles on U.S. roads by 2015.

Here is a solid goal. It doesn't include a cost but that is OK since people have a good idea of the cost difference between vehicles. Now, if only those cars were required to be US-produced with US parts... Don't laugh! The President used Germany and China as examples of where current technology gets BUILT. So, his auto SPENDING (to move to new technology) doesn't require being BUILT here with our technology! So build-it-here "policy" does not include the massive auto market but it does include solar and wind? Does that make sense?

Administration officials said Obama's plans would require significant spending on research and development, though they offered no cost estimates.

This is the last sentence of the story. It is the only follow-on thought that got asked and in print. Note that even AP was thinking about costs...

For AMSC shareholders, the good news is the President wants to spend more on alternative energy. At least, that is what he is saying. But, don't forget Clinton/Gore's last budget. They proposed cutting fuel cell and other alternative energy spending! It was an unthinkable move but they did it. Anything is possible when it is an "idea" prisoner to future Federal spending discussions.

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Sorry. Forget the bad news for AMSC shareholders in this morning's speech.

When the President talked about new technology in wind, his example was massive blades for wind turbines. He obviously does not know about 25%-owned Blade Dynamics and its lighter, quieter, more efficient, easier to transport (and maintain?) revolutionary blade technology. Blade's component approach to blades appears to me to be what we need to manufacturer here -- not the massive technology in use today that has transportation and assembly issues.

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You expect too much from a mere president, or his speech writers...
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ABC is digging into another aspect of the loans and grants for energy work -- favoritism:

With the government so large -- and bloated by borrowing of $.43 for every dollar spent -- it is hard to not think that the gigantic increase in spending doesn't easily spill into the hands that put key people in place.

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-- it is hard to not think that the gigantic increase in spending doesn't easily spill into the hands that put key people in place.

It worked that way for Cheney.
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