Underwriting Green Energy Projects Doesn’t Pay
Tom Steyer’s money can be enormously influential. The billionaire environmental activist is the single most powerful force behind the stymieing of the Keystone XL pipeline project.
In Pennsylvania, Steyer’s Super PAC, the NextGen Climate Action Committee, financed attack ads to defeat Tom Corbett in November. Four months later, Governor Tom Wolf unveiled, as part of his budget proposal, a plan that would put taxpayers on the hook for hundreds of millions in borrowing to underwrite solar, wind, and other alternative energy projects. The plan doubles down on manipulating the energy marketplace by covering the interest on the borrowed money with taxes on the Marcellus Shale natural gas industry.
To the victor go the spoils, of course, but in this case experience shows the spoils amount only to the creation of some very expensive temporary jobs, and "consulting groups" that collect fees for funneling money to the projects. A recent scandal in Oregon, leading to the resignation of the governor there, reveals the level of fees that the consulting groups can make. Extensive research by the PMA shows that earlier programs in Pennsylvania artificially supporting alternative energy projects failed miserably in both return on investment and the cost of energy production.
"We know how this movie ends," said PMA Executive Director David N. Taylor. "Blue-sky promises for ‘green jobs’ pry loose massive taxpayer and ratepayer subsidies for boutique low-yield energy sources which yield net job losses, wasteful market distortions, and more long-term public debt. Only a fanatic would look back on Rendell-era ‘green jobs’ boondoggles and ask for more of the same. Only a rabid fanatic would do that at the expense of an actual functioning industry."
From 2002 to 2010, the state money spent under the guise of nice sounding programs like the Pennsylvania Sunshine Act, which subsidized wind and solar projects, amounted to $530,244,247.00. Created in return were approximately 8,700 jobs and 44,960 megawatts of power, a review of agency records show. This translates to $60,926.61 per job and $11,794.21 per megawatt hour (or $2,705.00 per home). When you throw in all grants, tax credits, and loans under all the programs the total comes to a $1 billion taxpayer bill. That’s $120,000 per job. The news gets even worse, according to PMA’s Director of Government Affairs, Carl Marrara.
"It’s important to note in all of this, the US Bureau of Labor Statistics shows that nearly 75 percent of ‘green jobs’ are temporary," Marrara said. "It just doesn’t add up."
The inconvenient truth comes out even in defense of the Wolf plan. Acting Secretary of the Department of Environmental Protection, John Quigley, recently told the House Appropriations that the solar industry in Pennsylvania has fallen on hard times. "In Pennsylvania, the solar industry has contracted with the decline of federal and state support," Quigley said.
So why throw away more taxpayer dollars for an industry that can’t prove it can stand on its own weight
Benjamin Zycher, an energy and environmental policy scholar at the American Enterprise Institute, said that ideology rather than competitive rigor drives the energy policies of the left. As an example, Zycher likens Steyer’s philosophy to a recent EPA comment letter shaping its criticisms around exaggerated and unproven potential outcomes of the Keystone pipeline after the State Department declared it as safe.
The letter stated that "given the decline in world oil prices, Keystone XL, by reducing transportation costs, would increase the net price received by the Alberta producers, and so might increase oil sands output above levels likely to be observed at the lower world price, thus increasing GHG emissions and global climate impacts." Zycher notes, "The analysis is driven by a particular preferred conclusion rather than the reverse."
The real winners in financing this "preferred conclusion" are media buying groups and the consulting firms who have an inside pull with the programs. One filing with the Pennsylvania Department of States shows that Steyer’s NextGen Climate Action Committee paid $1,347,198.00 to Waterfront Strategies for media buys in Pennsylvania during the gubernatorial campaign. Waterfront is part of the Washington D.C. based GMMB, the Obama media machine. (In 2014, Waterfront handled nearly $42 million in media buys, almost entirely by liberal super PACs, making it the cycle’s biggest media vendor as well.)
Consulting fees can be lucrative, as the scandal in Oregon involving the promotion of green energy shows. Oregon Governor John Kitzhaber recently resigned over the unethical dealings of his fiancé Cylvia Hayes in lobbying for alternative energy firms.
According to Washington Times reporter Lachlan Markay, who follows the Steyer money trail, Hayes collected $118,000 in fellowship and consulting fees from the Clean Economy Development Center, a Washington-based nonprofit, for work on low-carbon fuel standard legislation in Oregon. At the time she was serving as an unpaid advisor to the governor. Hayes never disclosed the payments on her ethics filings for the governor’s office.
The Clean Economy Development Center closed its doors after the IRS pulled its tax-exempt status. Before it did, the center received funding for Hayes’s consulting work from another nonprofit, the Energy Foundation, which in 2012 received $200,000 in funding from Steyer’s "TomKat" Charitable Trust, according to the group’s latest 990 tax form.
Let’s keep Steyer’s money out of Pennsylvania and ask Governor Wolf to prioritize his budget rather than throw more than $100 million at an already failed project. The energy industry in Pennsylvania is doing just fine without their misguided interference.
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