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Company using technology from lab Obama used to plug green energy hasn’t produced any batteries

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Politics,Beltway Confidential,Michal Conger

Speaking at Argonne National Laboratory on Friday, President Obama announced $2 billion in green energy subsidies with the goal of getting U.S. cars and trucks off oil.

Argonne, a Department of Energy lab that has received more than $2 million in stimulus funds, licensed battery technology to LG Chem Michigan in 2011 to produce electric vehicle batteries, providing the manufacturer with a patented battery design.

The batteries were supposed to power the Chevy Volt. The problem is, LG Chem hasn’t produced a single battery yet.

The company received $151 million in stimulus money in 2010, which was intended to cover half the construction costs of its Holland, Mich., factory. Its other plant is in South Korea.

LG Chem was supposed to use Argonne’s design to produce the Volt batteries in its Holland plant once construction was finished.  But according to a recent Inspector General report, the company’s employees have been too busy playing video games to produce any batteries, despite spending $142 million.

“Through interviews with LG Chem Michigan management and other staff, we confirmed that employees spent time volunteering at local non-profit organizations, playing games and watching movies during regular working hours,” the report said. This “non-productive work” cost the DOE more than $1.6 in the third quarter of 2012 alone, the IG report estimates. LG Chem hasn’t produced a single battery that could be sold, either. “Even though the facility had produced a large number of test cells, the plant had yet to manufacture battery cells that could be used in electric vehicles sold to the public,” the report states. Company officials told the IG they had not begun production at the facility because demand for the Chevrolet Volt “had not developed as anticipated.” LG Chem also significantly underestimated labor costs and ran out of funding for planned construction at its Holland, Mich., plant. Only about 60 percent of the planned production capacity was constructed, and LG Chem says it won’t add production lines unless demand increases dramatically. In fact, production has not yet shifted from the company’s South Korea plant, even though, as the IG report noted, “Until the shift in production takes place or some alternative use for the plant is developed, U.S. taxpayers will receive little direct benefit from a plant for which they  provided up to half of the funding.” Update, 2:45 p.m. March 20: Argonne notes that while LG Chem has not produced batteries, other companies have used Argonne technology to produce electric batteries, including Chevy Volt batteries. The first graf also incorrectly said the president’s Energy Security Trust will dedicate $2 million, instead of $2 billion, to getting cars off oil.
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