In response to last nights ABC News Report sponsored by American University , which featured accusations on how the Obama administration’s Recovery Act was used to ship jobs abroad, Liz Salerno, from the American Wind Energy Association, dishes up the real facts:
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The article and report from ABC World News omitted some major facts: 100% of stimulus dollars going to the wind energy industry have gone to developers of wind projects constructed and operated in the U.S. Rather than shipping jobs overseas, as ABC asserted without a shred of evidence, building these projects created American construction, engineering, installation, transportation and operation & maintenance jobs, just when we needed them.
Repeat: Stimulus dollars aren’t going overseas. In fact, the stimulus dollars are leveraging billions of dollars from around the world and bringing investments INTO the U.S. economy, supporting jobs here. The U.S. wind industry was actually at risk to lose up to 40,000 jobs in early 2009, but it didn’t. The Recovery Act funding activated shovel-ready projects that would have otherwise been halted, and kept our industry employed for the most part, saving those 40,000 jobs.
What AU and ABC are really riled up about is the fact the wind turbines being erected across the United States contain 53% American-made content, instead of 100%. The U.S. wind industry is trying to increase those numbers as fast as it can, encouraging foreign-based manufacturers to locate here, and in just 4 short years we’ve added dozens of new manufacturing facilities. In 3 years, we went from 2 wind turbine manufacturers with facilities in the U.S. to 11 global turbine manufacturers with facilities in the U.S. and 4 additional turbine manufacturers with facilities announced. It takes time to ramp up, but the industry has been going at full-speed since 2005 and prior to the financial crisis, adding, expanding or announcing over 55 new manufacturing shops in 2008. Ignoring these facts, ABC said, blithely, “there is not much of a wind power industry in the United States.” Only 85,000 workers. Sigh.
Like the rest of the economy, the wind energy industry is currently struggling during the financial crisis to keep our manufacturing jobs and add more; we want the U.S. to be global leader in wind manufacturing. As intended, the Recovery Act provided short term help to keep up our momentum. To make this happen, it is going to take a long-term and stable market, investments from expert companies from around the world, and a backlog of product orders. This can’t happen overnight. Is ABC suggesting we do not want the billions of dollars invested in the U.S. economy just because the investments are from global companies? The wind power industry can bring new investment in the U.S. economy, from global and American companies alike, and the end of the day, an American job is an American job, regardless of the name on a uniform.
Cape Wind gets Washington Post support
The Cape Wind drama continues; no surprise there. This week Interior Secretary Ken Salazar took a tour of the site of the 420-MW offshore wind farm proposed for Nantucket Sound. At the same time, the Interior Department’s Inspector General reported that some federal agencies felt they were being rushed to meet Salazar’s imposed March 1 deadline for a final review. Today the Washington Post carried an editorial suggesting that, because the project has been under review for nine years, “Mr. Salazar should move Cape Wind along. ” That’s Sound advice.
Ms. Salerno’s comments should be considered for what they are, and wind industry advocate.
However, like so many of the green industries and in particular that of Wind farms, she is not sharing the true cost to American’s for these opportunities.
Take for example that ofState and Federal funding that has been provided to Horizon and other wind farm developers in Oregon.
In 2009 the US Department of Treasury awarded $546 million to Iberdrola from the stimulus program. It is expected per the CEO of Iberdrola they will receive another $470 million in 2010. Iberdola is the parent company of Horizon and the developer of Antelope Ridge.
The Elkhorn Wind Farm in 2007 and 2008 received 11 million in tax credit from the state of Oregon. In addition Union county gave Horizon a property tax deduction of $331,680.00 each year for 2008 and 2009 which will continue for the next 10 years. The federal government also allowed in 2008 and 2009 a Production Tax Credit (PTC) of $5,518,500.00 each year wherein it will continue for 10 years which will amount to $55,188,000.00. If you add up these numbers it amounts to in excess of 81 million over the 10 years which are nothing but taxpayers not investors creating their own and very expensive economic opportunities.
If the Antelope Ridge project is built and the county offers the same SIP as was given Elkhorn the taxpayers will be giving Horizon in excess 6.5 million in tax relief annually, in addition there will be more state subsidy plus a Federal PTC of 16.5 million will be allowed each year for 10 years for a total PTC of $165,864,000.00.
The interesting fact is that with Federal Production Tax Credit and Investment Tax Credits is if the wind farm does not have sufficient tax liability to use all the credit each year the unused portion can be carried forward.
Think too, that “Wind farm” owners may have a strong incentive to sell off or abandon their projects once tax benefits have been captured (5-6 years for accelerated depreciation; 10 years for production tax credits), turbine performance deteriorates, and/or operating and maintenance costs escalate. Economics may dictate abandonment of individual windmills or entire “wind farms” before the end of land rental contracts or current estimates of the useful life of the turbines. When and if this happens there will be no property tax revenue, jobs will disappear, and landowner leases will be worthless since no revenue will be generated, then we will be stuck with rusting relics.
While I certainly applaud the efforts to move away from carbon based energy, I do not however believe that this industry is in need of such a high price tag simply to reward top heavy corporate CEO’s with obscene financial rewards as happened with the investment market recovery funds.