Jobs or infrastructure?
America is a high-energy society — that is, we consume a lot of energy. According to Wikipedia the United States has long been the world’s largest producer and consumer of electricity, with a global share in 2005 of at least 25%. This consumption is a primary driver of growth. Energy is our economic blood.
The Energy Information Administration tracks and maps our current and potential energy sources. California is a big importer and converter of petroleum, which you can see in the excellent map above via the purple marks. Dependence on imported oil is something we need to phase out for a number of economic, political and environmental reasons.
The other thing that the map shows is a vast swath of California that is ideally suited for solar power (see the yellow shading in the southeastern area). It’s bloody hot out there, and that heat can create electricity.
Given that vast potential and the ability to redraw the energy picture, why doesn’t the federal government invest in rebalancing our energy sources from dirty oil to clean solar? The American Recovery and Reinvestment Act directed $6.7 billion to energy efficiency and renewable energy and $1.7 billion of this made it to California. The $1.7 billion is approximately 3% of the funds received by California and only $514 million has been distributed.
Why so little money for energy investment? Why direct just 3% of federal “stimulus” to the economic lifeblood of our nation?
We might find a partial answer in a Bloomberg column by former White House staffer Ron Klain. Mr. Klain was responsible for administering the Recovery Act while serving at the White House. In his piece, he says his colleagues always asked why the Recovery Act didn’t fund substantial infrastructure projects. He explains they weren’t funded because they don’t create many jobs:
The Hoover Dam, the granddaddy of them all, provided jobs for only 5,200 people at its peak employment level. The Tennessee Valley Authority’s signature Wheeler and Norris dams employed even fewer people, about 4,000 each.
Although Mr. Klain is right about the jobs created by the construction of these massive dams, he overlooks the vital contribution to the national infrastructure they created. At the time of construction Hoover Dam was the largest hydro-electric project in the world. When fully operational it generates 2,000 megawatts of electricity. It’s true the Hoover Dam didn’t create a lot of jobs in 1931, but it built a pivotal piece of our energy infrastructure.
That’s not to say the federal government has done nothing to address renewable energy needs. But the actions have been in the form of backstopping private efforts.
In April the Department of Energy agreed to a loan guarantee for a 484-megawatt solar thermal project called Blythe Solar Power Project. This week, it guaranteed loans for a Spanish company, Abengoa Solar, to build a 280-megawatt solar project and a 250-megawatt solar thermal project to be built by NextEra Energy Resources, LLC.
The Department of Energy’s efforts to guarantee approximately 1,000 megawatts of new solar energy in California is laudable. But we need to build this infrastructure at 10 or 20 times the current rate. The White House’s metric of job creation might not be the best guide to making investment decisions about our national infrastructure. Let’s hope it’s not a preference to have private firms build and control our energy infrastructure.
America is a high-energy society. In a time of great economic malaise, ensuring a clean, viable energy supply is one of the best contributions the federal government could make to strengthen and grow our nation. We can prepare our energy future. Here is my plan to get there.