Buying A Sustainable Economy

Almost daily, new funding press releases roll out from the Obama Administration—$2.4 billion for the “next generation” of electric vehicles, $3.9 billion for “smart grid” technologies, $467 million for geothermal and solar projects, $3.2 billion in local energy efficiency projects, and on and on. This stands in stark contrast to a year ago, when announcements were magnitudes lower in dollars and months apart in time.


The difference: President Barack Obama is trying to combat a recession and job losses with a huge ramp-up in green-energy spending. His goal is to generate new jobs while simultaneously transforming the energy marketplace, heading off global warming, and building a U.S. clean-energy economy and industry.


His energy spending marks a sharp departure from the past 25 years, both in quantity and focus. Indeed, the most similar jump in federal energy spending was a short-lived burst during the energy crisis of the 1970s, when then-president Jimmy Carter tried to develop an infrastructure to replace the supply of imported oil that was shut off by the Arab oil embargo.


Carter was motivated by high oil and gas prices, but when prices fell in the 1980s, then-president Ronald Reagan declared the Carter policies a failure and killed the projects. Reagan also cut federal energy funding and limited it to support for basic energy research and development, which has pretty much been the case ever since. Obama, however, is changing that.


In mid-February, when Obama signed the American Recovery & Reinvestment Act, the Department of Energy found itself with some $38.7 billion in new funds and as much as $60 billion in potential loan authority to support new clean-energy investments. Although the $38.7 billion is but a small part of the overall $787 billion stimulus package, it is a big deal to DOE.


The recovery act money comes on top of DOE’s regular budget of about $26 billion per year, but some $16 billion of that goes to nonenergy programs—care and maintenance of nuclear weapons and cleanup of former weapons facilities. Hence the recovery act dollars are more than three times higher than DOE’s energy-related budget, and the dollars must enter the economy with great haste—the act requires that they be entirely allocated, if not spent, by Sept. 30, 2010.


“This is not just an energy act,” says Skila Harris, one of eight DOE recovery team members in the energy secretary’s office. DOE has 200 to 300 staff working on recovery act issues.


“The act is designed to stimulate the economy and specifically to encourage employment with two powerful strains. One is to get the economy going by hiring people, and, two, we want to create a legacy infrastructure of projects that will last and add value to this economy and society for years to come. This is not like energy legislation of the past,” Harris says.


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