The Department of Energy has spent just 7 percent of the $37 billion it received from the stimulus for clean-energy subsidies, and already the Obama administration is pushing for another billion-dollar bailout for “green” industries. Last week in Georgia, the president unveiled a $6 billion “cash for caulkers” program, which would defray the cost of energy-efficiency retrofits in homes and businesses. He said the program is a good idea because these “green jobs” can’t be outsourced. To illustrate his point, Mr. Obama claimed, “It’s very hard to ship windows from China.”
It’s not as hard as the president thinks. With a simple Google search, I quickly found the Guang Zhou Hans Building Materials Technology Co. Ltd., Zhongshan Good Life Sun Sheet Co. Ltd. and Zehao Windows Manufactory Ltd., all of which export energy-efficient windows for the international market.
This wouldn’t be the first time the Obama administration used taxpayer money to send green jobs overseas. According to a recent report from the American University’s Investigative Reporting Workshop, 1,219 of the 1,807 wind turbines funded by the stimulus were manufactured in foreign countries. The report prompted four Democratic senators to send a letter last week to the Obama administration demanding a cessation of the wind-energy grants.
The Senate Energy and Natural Resources Committee held a hearing Thursday to investigate the slow pace of stimulus spending on green energy. Patricia Denton, testifying on behalf the Government Accountability Office, told the senators that the backlog in DOE’s environmental outlays was caused by - wait for it - environmental regulations.
Matthew Rogers, a senior adviser to the department, defended its stimulus spending by noting that it had saved 20,300 jobs. The department’s Web site reports that it has spent almost $2.5 billion of its stimulus share, which means each job cost about $125,000.
That’s a lot of money, and it’s a sound investment only if you think government is good at picking and choosing winners in the energy industry. History suggests it isn’t. Congress has thrown billions of dollars at dead-end energy startups such as the Clinch River Breeder Reactor and the Synthetic Fuels Corp.
There is evidence that green-energy subsidies are even worse than a waste. Money spent by the government on green energy cannot otherwise be allocated by the free market, and the difference in wealth creation is palpable. According to a study by Gabriel Calzada, professor at the King Juan Carlos University, green-energy subsidies in Spain have eliminated 2.2 real jobs for every green job created.
That’s a sobering statistic, especially in light of the fact that the Obama administration could create millions of jobs in the energy industry without spending a dime of taxpayer money. Last month, the National Association of Regulatory Utility Commissioners released a report showing that the government could produce 13 million jobs and generate more than $2 trillion in national wealth just by expanding access for oil and gas drilling on federal lands.
If the president is serious about his jobs agenda, there’s an easy two-step solution: (1) Drop wasteful green energy subsidies and (2) drill, baby, drill.
William Yeatman is an energy policy analyst at the Competitive Enterprise Institute.