Are ‘green energy’ policies thwarting job growth?

FLINT, Mich. — Kicking the can down the road, as President Obama did in delaying a decision on construction of the Keystone XL oil pipeline from Canada to Texas, certainly pleased the green lobby. But it did absolutely nothing for jobs creation. Nor did blocking access to new federal offshore areas for oil and natural gas drilling produce any jobs.

At a time when more than 13 million Americans are unemployed, you’d think that the president would be doing everything possible to stimulate employment. But his jobs-creation policy lacks direction and focus, based largely on blind faith in renewable energy sources and a childish trust in the good intentions of solar energy companies.

Putting off a decision on the Keystone pipeline and stalling offshore drilling was grossly counterproductive, compromising our commitment to North American oil production and potentially threatening our energy security. These and other regressive actions, such as pulling the plug on the Yucca Mountain nuclear waste project in Nevada and imposing a moratorium on mountaintop coal mining in West Virginia, don’t augur well for domestic energy development.

Is conventional energy production risk free? Of course not! But the environmental risks must be weighed against the economic and national security benefits of fully developing America’s vast energy resources. The current White House policy has been to keep our energy production system operating below capacity to placate environmentalists. A more sensible policy would aim to expand energy supply in such job-generating sectors as oil and gas drilling, coal production and nuclear power.

A study by Wood Mackenzie, an energy consulting firm, found that U.S. policies that encourage the development of new and existing resources could, by 2018, increase domestic oil and gas production by millions of barrels a day and support a million new jobs. Another study, by IHS Global Insight, estimates that returning permitting approvals to their historic levels before the oil spill in the Gulf of Mexico would generate 230,000 jobs in 2012. And these are mainly blue-collar jobs that could make a huge difference for millions of American households.

Continuing to pursue policies that slow down the issuance of leases and drilling permits, increase the cost of hydraulic fracturing for shale gas and delay the construction of oil sands pipelines are having a detrimental effect on jobs. If these obstacles are not addressed, we’ll be missing out on creating the millions of jobs needed to bring the economy back to pre-recession employment levels.

Moreover, hiking taxes on the oil industry makes no sense, especially in today’s sub-par recovery. Isn’t it clear by now that these taxes would divert capital that might otherwise be spent on energy production, which would create thousands of jobs?

The administration’s actions directly contradict what the market requires. What we need are not new taxes on oil companies, but instead for the administration to let the oil and gas industry pick up the pace of work in the Gulf of Mexico, Alaska and elsewhere.

Considering that Americans spend more than $500 million a day for imported oil, it would be absurd if we didn’t make better use of our domestic energy resources.

In his “Jobs for America” speech in the fall, Obama didn’t even mention the huge investments in shale-gas production in Pennsylvania, Texas and other states that are creating thousands of jobs and millions of dollars in revenue for governments. Nor did he propose developing oil and gas resources that are still off-limits in the Outer Continental Shelf off the East Coast and in the Gulf of Mexico.

Despite great handwringing over America’s anemic job creation, the president demonstrates little understanding of the damage his policies are doing to millions of unemployed American desperate to find work. Unfortunately, pleasing the environmental lobby seems much more important to him now than jobs.

Mark J. Perry, a professor of economics at the Flint campus of the University of Michigan and scholar at the American Enterprise Institute, can be reached through the website www.aei.org. By Sanya Carley and Martin Hyman

Con: Green energy is best route to profitable public investment

BLOOMINGTON, Ind. — The Obama administration’s investments in the green energy economy have already produced a great number of jobs in a sector with significant potential for additional growth. It would be a serious mistake to undercut the initiative just as it’s contributing to the recovery.

While estimates vary on exactly how many jobs the American Recovery and Reinvestment Act created, several experts have put the number at 2 million or more. Separate studies by Daniel J. Wilson of the Federal Reserve Bank of San Francisco, economists James Feyrer and Bruce Sacerdote of Dartmouth College and the Congressional Budget Office also conclude that government spending on infrastructure, goods and services produces one of the highest jobs-per-dollar ratios of all spending alternatives.

Included in this category of government spending is support of green energy programs such as weatherization, smart grids and the Department of Energy’s loans for innovative technologies.

A study conducted in 2011 by the BlueGreen Alliance and the Economic Policy Institute confirmed the jobs benefits of green energy policies. It found that the stimulus created or saved 997,000 green jobs — including jobs in the energy sector — through the end of 2010. One can view some of these jobs online via the website Recovery.gov, although these are only the “direct” jobs reported by project contractors and do not include “induced” jobs, such as those devoted to the production of the steel needed to make wind turbines.

Even more of these jobs can be viewed at the Department of Energy’s Loan Program Office website (lpo.energy.gov).

Although critics lambaste the Loan Program Office and the Recovery Act in general because of the Solyndra scandal, far more projects have successfully used Recovery Act money through these loans to create a total of 50,000 jobs — not counting indirect employment.

Some argue that these green jobs destroy other jobs in the fossil fuel industries, such as coal mining. But University of California at Berkeley researchers addressed this topic in 2010 and concluded that green and low-carbon energy investment produces significantly more jobs than are lost in fossil fuel industries. In fact, solar photovoltaic energy creates the most employment of all the energy sources the researchers studied. The researchers ultimately determined that increased energy efficiency and a high renewable portfolio standard target — along with nuclear energy and carbon capture and storage technology — would yield millions of full-time equivalent jobs.

Nor should anyone accuse the Obama administration of using government funds to prop up a sector best left in private hands. The Council of Economic Advisors finds that $46 billion in Recovery Act funds will leverage over $150 billion in clean energy financing by private investors. Such leverage includes assistance for building renewable energy facilities and developing smart grids.

Further, green energy represents not only a high-return investment for the federal government but a competitive world market in which America has arguably fallen behind despite years of continued growth in wind power and other sectors. These investments also benefit the public by reducing emissions of air and water pollutants, preventing global warming, addressing environmental justice, and more.

Princeton University economist and New York Times columnist Paul Krugman recently cautioned against only counting jobs gained while ignoring jobs lost. Of course, there were still 13.1 million unemployed Americans when last measured. But given the success and potential of Obama’s green energy policies, the real question is not whether his administration has hindered private sector growth. Rather, in light of research conducted by University of California and elsewhere, we should ask if the administration’s policies should be taken further, potentially along with the enactment of a clean energy standard or other national-level energy policies that target both energy and economic development.

Sanya Carley, an assistant professor at Indiana University’s School of Public and Environmental Affairs from which Martin Hyman is a graduate, can be reached at PEA, 811 E. Seventh St., Bloomington, IN 47405-7706.