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Renewable Energy vs. Biotech...Biotech is Losing

Original post made by Real Jobs, Pheasant Ridge, on May 1, 2011

First, full disclosure, I am a fiscal conservative, registered Republican living in the NorCal liberal enclave. But…I think that if two people want to get married, they should have that right, no matter what sex they are. I also believe all women’s health care choices should be between her, her family and her doctor…heck, I even believe that families making over $250,000 a year might even be able to pay a little more in taxes…granted; only if our Government finally proves that they can be responsible with the extra revenue.

I am also for ending corporate welfare. This brings me to my writing. This includes not only oil, but ethanol, agriculture and any number of subsidized industries. But the one I want to focus on here is the subsides for oil; I am not going to demonize by calling them “big” oil, because I am also an realist and I don’t think “small” oil could produce the amount of energy we need to run our economy or sink hundreds of billions of dollars into exploration and recovery. Sorry, we need oil companies to be big…so get over it.

The Obama administration is pushing for subsides for oil companies to end; the political winds seem to be blowing in their favor. I am all for this, but if we are also going to raise personal income taxes, then this additional revenue should be used to pay down the deficit; NOT be spent in more corporate welfare. The Administration claims that by removing subsides to oil companies that they will be able to gain an additional $3B to $4B dollars in new revenue; which they say will be used towards the fantasy of “green energy initiatives”, again, I’m not against green energy; let the free market do its thing; just as it did in micro electronics manufacturing and biotechnology. But with this new $4B in revenue the government once again wants to pick the winners and losers in the renewable energy sector…yes, more corporate welfare. They have absolutely no success in picking winners in renewable energy; every pick has been a flop, take Solyndra in Fremont, they picked a $550M tax payer funded loser, but that’s an entirely different story. And, the jury is still out on their investment in car companies to produce hybrids and electrics…sorry, there are too many folks like me in CA that enjoy driving their 335i’s; no matter what the price of gas is.

The renewable energy lobbyists, yes lobbyists, claim China is decades ahead of us in green energy…absolutely true. What folks don’t realize is why. Green energy manufacturing is dirty business. Solar panel manufacturing plants use some of the most dangerous and hazardous chemicals on the planet. Thiourea, Cadmium Sulfate, Acids and a huge number of cancer causing and flammable solvents. Based on this, does anyone really think that here in CA, with our regulations and government bureaucracy, that we can really compete with China in the manufacturing of renewable energy products? How about labor? Unlike microelectronic and pharmaceutical manufacturing; there is no a high level of technical expertise in renewable energy manufacturing, once the product has been designed (no great science here) once the line is running, it’s then automated and can be run by unskilled workers. Senator Boxer stated during her re-election campaign that green energy would create thousands of high paying jobs in CA…not accurate! This isn’t like separating a single protein from a Chinese Hamster ovary and then over decades of trail and error have that same cell line fermented in 20,000L reactors of these proteins and then developing that protein into a life saving drug. Nope, this “green energy” is science that is already out there, and private investors know it. They are looking for the government to give out large handouts to a few companies just like Solyndra, that drives their stock prices up and they then make a couple of million before the company crashes, just like Solyndra; which it is sure to do. Yes, we have the technology to make jet fuel from algae. Heck, again, we have a company in the Bay Area, Genencor, who with Goodyear made a tire from an enzyme. You can read all about it on their websites, even see it in their lobby in Palo Alto. But have a private moment with one of the engineers, and he will tell you, that they will never be able to do it commercially. Even if they could do it at a price people could afford, and they can’t; can you imagine the regulations and costs associated getting it approved by the DOT!

So while the Administration continues to pour even more billions of corporate welfare into a non-viable renewable energy sector, it is true, a few speculators and workers will benefit. But like our microelectronics industry that created tens of thousands of high paying jobs right here in CA, these jobs, again like micro jobs, even if they could be created, would soon disappear overseas. This is not a statement of speculation or politics, like it or not, this is a fact and CA will be back to square one looking for the next big industry to send to China, or Singapore, or Malaysia.

So where are the good jobs now and where will they be in our future? Well, I guess if you’re a Federal or State Government employee you should be alright. CA is in a fiscal crisis due to this and Government employees seem to sometimes forget that the taxes they pay are on the taxes private industry pays to pay for their salaries and benefits…less revenue into the coffers and with the ever increasing costs of Government benefits... well I think even people who never thought about this are thinking about it now. Are those previous high tech jobs in San Jose and Sunnyvale going to come back again? Nope. Sorry. IMB and Seagate have left for Asia. And while Hitachi, Perkin Elmer, Phillips, Agilent and even Intel still have locations here in the Bay Area; they are skeletons of what the once were, now doing only critical part manufacturing, research and administration.

So again. Who’s hiring? Who has the great jobs? Who is stuck in CA even though there are many who would like to leave? Uh oh, here goes, the big dirty word…BIG PHARMA.
Yes, Genentech (Roche), Novartis, Baxter, Nektar, Pfizer, Bayer, Johnson & Johnson, Gilead, all of these big drug companies that the liberals love to hate continue to create new jobs and pay a huge amount of revenue into the CA state coffers.

Have you been in CA long enough to know why these companies are here and why the Biotechnology industry can once again drive CA’s economy?

First and foremost, these companies came to CA over a decade ago because of CA’s unmatched academic research institutes. Here in NorCal, Berkeley, Stanford, USF and UCSF were producing some of the most talented scientists in the world; in fact, we were attracting scientists’ worldwide, the youngest and brightest. In SoCal, the same thing was happening in the San Diego area, cutting edge research institutes like Scripps and Burnham in collaboration with their great universities were spinning off new drug discovery companies run by scientific entrapuners at an unbelievable rate. And these small companies were funded by private capitalists eager to get into the game. These drug discovery incubators produced new small and large molecule drug candidates that were swallowed up by “big pharma” who then had the resources to bring these drugs to blockbuster status creating thousand of new high paying real jobs in pharmaceutical manufacturing in just a few short years.

Here in the Bay Area, South San Francisco changed almost overnight. A little known company called Genentech, produced the first approved biopharmaceutical drug, a human growth hormone and then…it was on! The NIH funded academic research at our universities; these dollars were spent discovering new molecules, these molecules were developed by the best scientists in the world and then acquired by pharmaceutical companies who had the resources to bring them to a commercial market; then these companies: yes, “big pharma” also started pouring hundreds of billions of more dollars into our universities to fund more research and create more talented young scientists; it was a business model coveted by every state in the nation...and every developed country in the world. Company after company built large facilities here, it has never been better. At that time, we had a mature pharmaceutical industry and then a rapidly exploding high tech industry; we were living a dream, a nirvana; how did it all end?

Oh yes, ended it did. Have you been to South San Francisco lately? Oh, Genentech is still there, and Amgen has a small molecule discovery operation still. There are still a few small companies, but most are doing diagnostic and clinical products, easier to bring to market because of less regulation, but not near the profit potentials; or job creation potential. Parking lots that were once full with hundreds of cars now have a dozen or so; grass growing in the parking lot cracks; “For Lease” signs are everywhere.
What happened? Lots of things; but renewable energy, is a major culprit. An industry that has yet to create any real number of good jobs here in CA is now sexy…and not viable. Ms. Boxer was reelected because of the allure of it and the militant greens are blinded by it. What if that $550M of government loan guarantees had gone to South San Francisco drug discovery companies instead of rapidly dying Solyndra? Do you think an industry that has proven itself has a job creator would have spent it more wisely? While our universities continue to produce the best molecular biologists and chemists in the world, even though they are now dramatically under funded by the NIH and private industry, many of the current students are foreign nationals and they graduate and go back home to countries in Asia, North Africa, Eastern Europe and yes, even the EU…and kick our butts. Genentech and Novartis and companies like them have recently built new plants in Singapore and other Asian locations. Why not here? Do you really need to ask?

But even with the unfortunate and negative tag of “big pharma”; this big pharma continues to add new; high paying jobs in CA, while the renewable energy sector does not. Tesla? Don’t make me laugh! Tell me about Nektar moving their corporate offices and headquarters to Mission Bay in San Francisco; or Bayer opening a R&D Center right next door to them; this equals new REAL jobs. How about Novartis transferring a new product from France to Vacaville creating hundreds of high paying new jobs…ask these new employees, some of whom were hired by Novartis after a large layoff at the nearby Johnson & Johnson facility if they hate big pharma.

Sorry, but these are great companies doing great work. Yes they earn a profit, sometimes a very big one, but I can tell you from knowing these companies that they go out of their way to take care of their people and communities. Fortunately for CA, these existing companies are here to stay. Doesn’t it make sense to stop feeding a money hungry, unproven green energy industry with billions of taxpayer dollars; and start re-funding a viable and proven industry who continues to create thousands of good jobs in CA while at the same time bringing life saving new drugs to the world? I think so…but I am biased; I know and work with the great people that do this incredible work.

Comments (1)

Like this comment
Posted by mellow fellow
a resident of Another Pleasanton neighborhood
on May 1, 2011 at 1:39 pm

@ Real Jobs:

First, it's wonderful to see someone take time to write such a deep and well thought out comment. It takes time and dedication. So, on that note I thought I would like to provide some feedback on your view of why pharmaceutical companies are hitting the all so to speak.

The game in pharma is to develop a hit drug. One that knocks it out for a home run. The fact is, they haven't really made a new big hit discoveries lately. (Do some research and you'll find this to be true). Because drug companies built a model on big rock & roll hits and the hits stop churning out... Blam! You got it! Crash. But in the pharma's case it's more of a thud.

My point is that the implosion is not due to some secret, conspiratorial scheme by California hipsters working in collusion with underground marketeers in the new energy field. It's the classic model and growth curve of a very greedy industry hitting the "all you can eat" wall.

But, I understand, we all want infinitely appreciating assets ... you know like homes, business, dreams and personal fulfillment. That pesky thing call Gravity kicks in and ruins everything.

Sorry, but further commenting on this topic has been closed.

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