This month, a host of chemical and battery manufacturers formed a coalition that will seek $1 billion from the federal government to build a domestic industry for electric car batteries. Ideally, the money will be used for a factory that will then sell basic battery cells to members like 3M, who will then package them full batteries different than the ones produced by the 13 or so consortium members.

The idea is that the U.S. wants its own supply of batteries so we won't become dependent on Asia like we did on the Middle East to keep cars on the road.

"Today we have no large-scale lithium-ion manufacturing in U.S., so all cells with minor exceptions have to be imported from China, Korea or Japan where governments have subsidized these industries for many years," Jim Greenberger, an attorney with Reed Smith LLP (Chicago) which organized the alliance, told EE Times. "The U.S. government has to step up and do the same."

First, building up the battery industry in the U.S. would be great for our economy. I also want to salute the U.S. battery startups – Boston Power, PowerGenix, ZPower, International Battery, Altair Nano, Valence Technologies, Tesla Motors, Imara, Deeya Energy, A123 Systems – who have helped jumpstart the energy storage market here. If the organization were lobbying the U.S. government for a billion that would be given to universities to study energy storage, I'd give it a "one of the year's best. Riveting!" review.

But the argument that we could put ourselves in the same bind we are in today unless we give a billion dollars to established manufacturers for factories is a complete and utter pile. And here's why:

1. Batteries Come From Our Allies: Lithium-ion batteries largely come from three places: Japan, South Korea and China. Despite sometimes rocky relations (remember all of those movies in the 1980s where Sean Connery or Michael Douglas would go to Tokyo to learn some philosophical mumbo jumbo and drop kick guys off of motorcycles), the alliances with Japan, South Korea and Taiwan are solid. Why? They are all afraid of China. And don't forget, many of the batteries made in China are made by or on behalf of companies rooted in Japan, South Korea and Taiwan (see Batteries Key to Plugging In at Electric Vehicle Symposium).

Don't forget, we don't have any large screen TV makers in this country either, and you don't hear a lot about us losing our edge in couch potatoes.

2. Batteries Don't Come out of the Ground: If you want to know the root of OPEC's power, this is it. Kings and autocrats can claim control of land, minerals and oil deposits under their domain -- it's one of the perks of the job. Saudi Aramco became the largest oil company in the world through nationalization. You can't do that with batteries because batteries are based around intellectual property. If a country moves to nationalize it, the entrepreneurs and scientists conveniently hit the road.

3. Batteries Are Components: I've covered semiconductors and components for over a decade and can firmly tell you one thing about the market: It's very difficult to make money. Excessive competition continually puts pressure on margins. Worse, to stay in the market, you have to continually erect new, multi-billion dollar factories just to stay even with your rivals. Components aren't really a business: It's more like a bad gambling habit.

Some companies – Intel, Samsung – make money on a regular basis, but it's tough. Thus, one of the things that U.S. battery makers will discover is that they need to outsource jobs to China to stay competitive. That said, the startups listed above might actually do well in this sort of environment. If they can become "fabless" or semi-fabless battery makers, creating higher paid design and engineering jobs here and maybe even some manufacturing jobs. But it could be economically impossible to bring a lot of manufacturing jobs here.

4. Cars – That's the Problem: The real money in electric cars will lay with making the cars themselves. Car makers will squeeze the battery makers, slap on some name-branding, and then reap higher margins. Unfortunately, American car technology peaked with the cup holder. As a result, even if we build a domestic battery industry, the companies that want to buy them won't be selling many cars (see Toyota Drives Towards a Greener Fleet).

5. Washington and the Tech Community Really Don't Mix Well: The Federal government has tried to create jobs in the tech sector before, but the results aren't great.

"There is zero interest in Washington in the semiconductor industry," Brian Halla, CEO of National Semiconductor told me earlier this month, adding, "Every single problem on the face of the earth will be solved by semiconductor technology and I'll put energy on the top of the list."

Halla's comment underscores the chronic state of affairs. The government complains about not getting results it can tout and tech companies complain that the government interferes. Sematech, which gobbled up millions in the ‘90s, did help the U.S. chip industry recover, but a lot of the turnaround can be credited to the fact that U.S. manufacturers got out of the cutthroat memory business. Reactions to Sematech remain lukewarm.

Remember FutureGen, the U.S. public-private partnership to build clean coal plants? You never thought you'd see the coal industry and the Bush industry at odds, did you.

6. $1 Billion Would Go Farther in Research: Tech leaders, however, almost unanimously agree that federal money spent on research pays off. It helps develop students and intellectual capital, as well as breakfast drinks like Tang. And often, lab projects concocted at universities – Google, Yahoo, Genentech, Amyris, Coskata -- go on to become big deals. Research budgets have been starved for nearly a decade.

7. Green Cards Could Solve the Problem Quicker: Here's an easier way to make the U.S. a center for electric transportation. Give out green cards with PhDs instead of kicking new graduates out. We'll have a huge number of the world's experts living here in ten years.