Obama Stimulates Big Business Allies, Not the Economy

[lostinblue 1,989]

Obama Stimulates Big Business Allies, Not the Economy

By Tom Borelli

Last week’s disappointing Labor Department employment report is a stark reminder of the failure of President Obama’s $787 billion economic stimulus package to initiate job growth. The national unemployment rate remains at a stubbornly high 9.6 percent, with payrolls falling by 95,000.

However, the failure of Obama’s economic recovery plan to keep unemployment at or below 8 percent has not deterred the president from using stimulus funds to drive his green economy fantasy. On the contrary: During a recent radio address, Obama touted his recovery plan is plowing over $90 billion of taxpayer money into clean energy projects.

While these funds have failed to stimulate job growth and kick-start economic expansion, they have bailed out Obama’s big-business allies, who are betting on the president’s green agenda. Dolling out stimulus money to corporate interests serves a key political need for Obama: it rewards companies for lobbying for his energy policy.

Despite all the rhetoric of Obama’s anti-business leanings, visible when he speaks of energy policy just as with health care reform, the president has carefully tailored his legislative goals to appeal to corporate special interests.

Consequently, it’s not surprising to discover that many of the remaining corporate members of the United States Climate Action Partnership cap-and-trade lobbying group, including General Electric, Duke Energy, NextEra Energy, Exelon, and Honeywell, all received economic stimulus funds.

These companies have banked on a federal law, like Obama’s, to reduce carbon dioxide emissions.

General Electric is perhaps the company reaping the most from Obama’s stimulus plan. As noted in a 2009 Wall Street Journal story, “General Electric Pursues Pot of Government Stimulus Gold,” GE CEO Jeff Immelt geared up his lobbying army to exploit President Obama’s economic stimulus package.

According to Recovery.gov, GE is the beneficiary of over $49 million in grants and contracts from a wide range of government departments, including Energy, Defense, Justice and Health and Human Services.

Taxpayer support of GE’s business, however, is not guaranteed to translate into job gains.

CNSNews.com tried to confirm that GE was the recipient of 14 grants worth $24.9 million and to determine if the company added employees as a result of taxpayer money. GE declined to comment on the request.

Although GE apparently will happily feed from the taxpayer trough from any government source, it seeks its biggest payout from Obama’s energy policy.

GE will profit from the Department of Energy’s recently announced plan to guarantee a $1.3 billion loan for the world’s largest wind farm. If finalized, the loan would support the Caithness Shepherds Flat wind venture in Oregon, a project co-sponsored by GE.

In announcing the plan, U.S. Energy Secretary Steven Chu credited the Recovery Act for supporting the loan program. The wind farm project will use 338 wind turbines supplied by GE.

In addition to direct government support of its energy business, GE will likely benefit from the hundreds of millions of dollars that were given to three of GE’s utility customers, Duke Energy, NextEra Energy and Exelon. Each of the aforementioned utility companies received a $200 million grant from the Department of Energy to develop the smart grid.

Although Obama’s energy suffered a setback when cap-and-trade failed to pass in the Senate (so far), the president and his big-business allies have been very resourceful in working their green energy partnership thorough the economic recovery plan. At some point, however, those funds will dry up.

The next target for the Obama/big-business alliance is a renewable energy standard. Sens. Jeff Bingaman (D-NM), Chairman of the Senate Energy and Natural Resources Committee, and Sam Brownback (R-KS) recently introduced a renewable energy standard bill in the Senate that mandates 15 percent of electricity must be derived from energy sources such as wind and solar power by 2021.

Mandating the use of renewable energy products to generate electricity will boost GE’s profits, since it will force utilities to buy wind and solar power products that the company makes. The renewable energy standard also fits nicely with Obama’s promise to pursue his energy agenda in “chunks.”

Unfortunately, a renewable energy standard will not help our economy or promote long-term job growth.

The experience of countries such as Spain found that a green energy economy falls far short of its goals.

Unless we find a way to break up Obama’s big-business alliance, our economy will be saddled with greater deficits, higher energy prices and slower economic growth. We need to cap bailouts, not carbon emissions.

Tom Borelli, Ph.D., is director of the Free Enterprise Project at the National Center for Public Policy Research.

[Ban Hammer 13,470]

and all this time i thought the dems hated big business.

[elmcitymaven 9,712]

Couple of things:

CNSNews.com tried to confirm.....

Tom Borelli, Ph.D., is director of the Free Enterprise Project at the National Center for Public Policy Research.

CNSnews.com is a conservative news outlet linked to the Media Research Center, a right-wing "content analysis organization" that receives money from ExxonMobil. The NCPPR is a right-wing think tank that also receives money from ExxonMobil. Hmmmmmm.....

Consequently, it's not surprising to discover that many of the remaining corporate members of the United States Climate Action Partnership cap-and-trade lobbying group, including General Electric, Duke Energy, NextEra Energy, Exelon, and Honeywell, all received economic stimulus funds.

Do you see any big names missing from that list? Oh, like ExxonMobil? ExxonMobil has never been part of the US-CAP, which also counts amongst its members Shell and BP -- direct competitors. Some big names not mentioned include the Nature Convervancy, Ford, GM and the Pew Center on Global Climate Change.

Unfortunately, a renewable energy standard will not help our economy or promote long-term job growth.

The experience of countries such as Spain found that a green energy economy falls far short of its goals.

I would have like to have seen something more convincing here than bald statements, particularly regarding how Spain has had issues with pursuing a more green energy ethos, but I'm not terribly surprised. I tend to have a very healthy helping of scepticism when anything issued from a demonstrably right- OR left-wing think tank makes such assertions. There's a lot of numbers and accusations here, but pretty much no sourcing.

[lostinblue 1,989]

http://www.juandemariana.org/pdf/090327-employment-public-aid-renewable.pdf

Pajamas Media has received a leaked internal assessment produced by Spain’s Zapatero administration. The assessment confirms the key charges previously made by non-governmental Spanish experts in a damning report exposing the catastrophic economic failure of Spain’s “green economy” initiatives.

http://real-agenda.com/2010/05/19/green-policies-in-spain-are-a-total-failure/

) Renewable Energy Situation: The price of electricity determines the competitiveness of Spanish industry

Energy is a key input in industrial production processes. In basic industries (cement, industrial gases, metals, basic chemicals and steel), energy costs are three times the labor cost. The electrical cost for the Spanish industry is well above the European average (+17% higher).

4) Renewable Energy Situation: The price increase is mainly due to additional costs of renewables

The price of electricity determines the competitiveness of Spanish industry

Historical evolution of the prices of light and pool price [Appears above a graph showing a 77% price spike in industry's price for electricity]

A price increase cannot be explained by the evolution of electricity market price (pool), which has even fallen since 2005

5) Renewable Energy Situation: The price increase is mainly due to additional costs of renewables

The increase in the over-cost paid for renewable energy explains more than 120% of the variation of the electric bill, and has offset the reduction in production costs of conventional electricity (25%)

To these direct costs of renewables must be added indirect costs, as the need for additional investment in networks to integrate renewables (about 10% of planned investment in the planning) and capacity payments to the modular backup facilities (coal and gas) that are running a smaller number of hours

6) Situation of renewable energy: renewable energy has had a positive impact …

Thanks to the increase of renewable energies in the mix:

The rate of energy supply has increased by 3 points since 2005, to 23%, and the import of energy products has been reduced 5.500M Euro (including hydraulics).

Emissions have been reduced significantly, thanks primarily to the mix of electric generation being much cleaner (less than 120 tons of CO2 emissions per GWh of oil produced).

7) Situation of renewable energy: but its evolution in recent years has been too fast

From 2004-2010 the amount of premiums [over-cost paid for renewable energy; the subsidy] has increased fivefold. Only in 2009 it doubled over the previous year to reach 5.045M€, equivalent in amount to the entire public investment in R + D + i in Spain. [The renewables subsidy equaled the entire cost of producing electricity in Spain]. The forecast for 2010 is 6.300M€ (although 5.800M€ budgeted in January). This should add 1.000M€ for cogeneration.

With operational facilities, the renewable sector will receive in the next 25 years more than 126.000M€. In this factor, it adds a commitment to continue providing input to the renewable energies in the mix to meet the European objectives, which will increase this figure significantly.

8 ) Situation of renewable energy: Heterogeneity of renewables: costs

In 2009, the solar photovoltaic technology accounted for 53% of the extra cost of renewables, while they contributed only 11% of energy generated from these sources.

9) Situation of renewable energy: Heterogeneity of renewables: Impact on the external sector

Exports: Net exports of Spanish wind industry 1.300M€ contributed to the trade balance in 2008 and, besides, wind generation avoids fossil imports of 3.6M€.

Imports: By contrast, the PV industry growth was not gradual, hampering the formation of an auxiliary Spanish industry. In 2008 imports of photovoltaic cells and modules in Spain amounted to 5.182M€ (28.6% of net imports of crude and derivatives) as long around the 62% were imported.

10) Situation of renewable energy: Heterogeneity of renewables: Technical problems

Network Management. The proliferation of small plants and fluctuations in the availability of technologies hinder the management of the network.

11) Situation of renewable energy:

Regulatory mechanisms to support renewables have been:

– Pioneers in the world, which has allowed us to stay ahead of the industry, learn from the experience and finding some excesses.

There are numerous examples of these high returns: analyst reports, premiums accepted in other countries, over-subscription in the pre-records, facilities willing to accept lower premiums, “paper market” …

– Overly cautious about the ability of cost reduction technologies

– Inflexible, thereby preventing adjust remuneration to market signals and technological advancement

– Hardly told them by the administration in setting prices initially and have no control over the amounts … Which has caused a “bubble effect,” such as seen with photovoltaics in 2008 and the emergence of the thermal bubble (which would have continued in 2010 and successively had it not been for the pre-registration requirement imposed), as well as a sharp increase the over-costs [subsidies] paid to renewables in the form of a feed-in tariff.

12) Situation of renewable energy: Heterogeneity of renewables: International comparison

In wind power, our rates are in line with Europe. However, solar photovoltaics, Spanish retribution has been the most high, despite the higher number of hours of sun and more solar radiation.

Spain Wind € 75-84/MWh Solar €265/295/350/450/MWh

China Wind € 56-67 Solar € 121/MWh

Japan Wind € 73-89/MWh

Germany Wind € 92/MWh Solar € 287-395/MWh

France Wind € 82/MWh Solar €310-380

Italy Wind € 85/MWh Solar € 350-390

Poland Wind € 90/MWh

13) Situation of renewable energy: Recent technological developments

The investment costs of renewable energies mainly depend on its technological learning curve

The plots have experienced tremendous technological development in recent years, reducing their investment costs

Not being mature technologies, have much future room for improvement, which informs a decision to slow its current expansion

14) Situation of renewable energy: What have we done?

The Government has adapted the following initiatives:

– A new framework for PV in 2008 (RD1578/2008) that brings order to the pace of installation and marking signs ecstatic that transfer with May fast technological development gains to consumers

– Creation of a technology pre-registration for the remainder of May 2009 has allowed us to avoid the “bubble” that was generated in thermal and prevent the system being made even more untenable in 2010.

– Package of measures for the reduction to the tariff deficit with input from the traditional electric companies, consumers and government (without the contribution of renewable energy).

15) Situation of renewable energy: Difficulties in reducing the tariff deficit

– The Government is committed by law to eliminate by 2013 the tariff deficit

– Despite the evolution of the wholesale market (pool), the balance of certain items (the Iberian peninsula, nuclear waste) and higher light, the rate deficit was only slightly reduced.