By Marita Noon
Sunday, July 14, 2013
On Wednesday, July 10, the House passed H.R. 2609—which
Bloomberg News called a “$30.4 Billion Energy-Water Spending Measure.” The 2014
Energy-Water Development appropriations bill will cut spending on renewables
and other green energy programs in half and was passed mostly along party
lines—with 4 Republicans voting against and 7 Democrats for it.
Democrats offered amendments to the bill aimed at
restoring funding to renewable energy programs, which failed. Republicans’
amendments focused on cuts: Rep. Tim Walberg of Michigan sponsored an amendment
that would eliminate spending for a national media campaign promoting
alternative energy, and Rep. John Fleming, M.D. of Louisiana sponsored an
amendment to stop a $3.25 billion green energy loan program—both were approved.
While many of the different taxpayer funded green energy
programs introduced in the 2009 stimulus bill —which have produced more than 50
bankrupt, or near bankrupt, projects—have now expired, the Fleming amendment
draws attention to a pot of money that is, currently, largely unspent. Fleming describes this remaining boondoggle:
“The Obama 2009 stimulus bill cost taxpayers about $830 billion, and much of it
was wasted on growing government and administration giveaways, like a $3.25
billion loan program that put taxpayers on the hook for failed green energy
projects. A company could take a government loan and walk away from a project
without paying taxpayers back, even if the company remained in business. In a
free market economy, companies may turn to banks and investors to borrow money,
but the government should not force taxpayers to be lenders, even as it gives
borrowers a pass on paying back their loans.”
While Republicans realize the embarrassing failure of the
stimulus bill’s green energy programs, Democrats want to keep spending—often in
the face of opposition from their usual supporters. One of the most
controversial commercial green energy projects,Cape Wind, provides a case in
point.
Proposed in 2001 for Massachusetts’ Nantucket Sound, the
Cape Wind project will span a highly-congested 25-mile area known for frequent
fog and storms that is surrounded by shipping routes used by shipping
operators, ferry lines, commercial fishermen, and recreational mariners. The
Cape Wind industrial offshore wind energy project consists of 130 440-foot
high, wind turbines (made in Germany, potentially financed by a Japanese bank)
and nearly 100 miles of cable.
In 2010, the National Park Service deemed Nantucket Sound
to be eligible for listing on the National Register of Historic Places as a
Traditional Cultural Property (TCP) because of its cultural significance to the
local Wampanoag tribes. (Note: a TCP designation successfully blocked uranium
mining in New Mexico.) The Mashpee Wampanoag Tribe on Cape Cod and the
Wampanoag Tribe of Gayhead/Aquinnah on Martha’s Vineyard believe that Cape Wind
would not only desecrate sacred land, but also harm their traditional religious
and cultural practices. In opposition to Cape Wind, the Wampanoag Tribe of
Gayhead/Aquinnah currently has a lawsuit pending in U.S. District Court in DC.
Nantucket Sound is home to several species of endangered
and protected birds and marine mammals and has been designated an Essential
Fish Habitat. Cape Wind’s construction and operations would threaten this rich
and fragile environment. Numerous environmental organizations, led by Public
Employees for Environmental Responsibility, have a lawsuit pending for
violations of the Endangered Species Act and the Migratory Bird Treaty Act.
Opposition to Cape Wind also comes from groups who side
with jobs and economic development.
· Commercial
fishermen, who earn the majority of their income in the area of the proposed
site, believe this project would displace commercial fishing and permanently
threaten their livelihoods. They vehemently oppose Cape Wind.
· A decline in
tourism, according to the Beacon Hill Institute at Suffolk University, would
lead to the loss of up to 2,500 jobs and property values would decline by $1.35
billion.
· Located in an
area with more than 200 days of fog per year and quickly changing weather, Cape
Wind would create significant navigational hazards for thousands of commercial
and recreational vessels and pose an unacceptable risk to aviation safety. The
local ferry lines, which transport more than three million passengers every
year, have called the project “an accident waiting to happen.” All three local
airports strongly oppose the project and have expressed safety concerns for the
millions of passengers flying over the Sound each year.
· The project
would impose billions of dollars in additional electricity costs for
businesses, households, and municipalities throughout Massachusetts. Dr.
Jonathan Lesser, President of Continental Economics, calls Cape Wind a “poster
child for green energy excess.” In a 2010 peer-reviewed paper, he stated: “the
billions of dollars Massachusetts ratepayers will be forced to pay for the
electricity it generates will not provide economic salvation but will simply
hasten the exodus of business, industry, and jobs from the state.”
Despite widespread opposition, President Obama and
Governor Patrick are closely allied and working together to push Cape Wind
forward for political advantage. Audra Parker, President and Chief Executive
Officer of the Alliance to Protect Nantucket Sound (APNS), says Cape Wind is “a
project that is controversial, extremely expensive, and one that has been
propelled forward by shortcuts, bending of rules, and political favoritism.”
Freedom of Information Act (FOIA) requests and House
Oversight Committee research found significant coordination between the Patrick
and Obama administrations through the Department of Interior to push Cape Wind
forward and gain financial assistance for Cape Wind through the loan guarantee
program. For example, a June 24, 2011, email (acquired through APNS FOIA
requests) describes a request by the White House to include Cape Wind in an
economic briefing for the President on the loan guarantee program: “The WH was
very direct about what should be included in the slides so we don’t have much
flexibility.” The email specifically stated that the White House wanted: “1
slide on status of Cape Wind (because he [the President] has heard from Gov.
Patrick a few times – they are close friends).” In the months prior and after
Cape Wind was notified that its application for section 1705 assistance was put
on hold, there were numerous meetings and calls between MA state officials,
including Governor Patrick, with senior officials at Department of Energy
(DOE)and the Loan Guarantee Program, including the usual players: Jonathan
Silver and Secretary Chu.
In April, US News addressed a new Government
Accountability Office (GAO) report that points to federal subsidies for wind
energy that are rife with wasteful spending: “The GAO report finds substantial
overlap in federal wind initiatives. This duplication allows some applicants to
receive multiple sources of financial support for deployment of a single
project.”
Once again, the $2.6 billion Cape Wind construction is
illustrative of how the overlaps can give the developer more in taxpayer-funded
benefits than the project’s actual cost. Federal incentives, including a $780
million energy investment credit, a DOE loan guarantee, and accelerated
depreciation could be more than $1.3 billion—or more than 50% of the project’s
cost. But, this just represents the federal package. Add in state incentives
and the combined total could be $4.3 billion—exceeding the projected cost by
167%. Cape Wind claims to create only 50 permanent jobs—which would equal a
staggering $86 million per job.
But, it is not just the money—though in the current
constrained fiscal environment, money is a huge consideration. Government
agency recommendations and/or policy—including the Advisory Council for
Historic Preservation, the Federal Aviation Administration (FAA), the Bureau of
Ocean Energy Management, Regulation and Enforcement, and the US Fish and
Wildlife Service—had to be overridden or overlooked to prevent “undue burden on
the developer” that “could possibly bankrupt them.”
For example, a May 3, 2010, FAA PowerPoint presentation
to Eastern Service Area Directors includes a slide titled “Political
Implications” which states: “The Secretary of the Interior has approved this
project. The Administration is under pressure to promote green energy
production. It would be very difficult politically to refuse approval of this
project.”
While this quick overview of the Cape Wind project barely
touches the surface issues, it highlights the folly of allocating billions of
dollars of state and federal money for green energy projects at the expense of
the taxpayers. Any stimulus funds designated for green energy, but not yet
“invested,” should be withdrawn; taxpayers should be taken off the hook—which
is the goal of the Fleming amendment passed on July 10.
Too bad these specifics in the 2014 Energy-Water
Development appropriations bill are little more than a representation of the
different approaches of the parties: one wants to fund more green energy
projects and the other wants to cut—which also reflects the division throughout
America. Because our government is operating on one continuing resolution after
another, the appropriations bill is a mere formality. As pointed out on June
25, at Georgetown University, President Obama intends to “invest in the
clean-energy companies”—despite the exorbitant financial cost of the projects
and economic damages they will cause the public.
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