President Obama has often justified his subsidization of green energy companies by citing the need to compete with countries such as China, but a new House report shows that about $4 billion of stimulus funding went into the bank accounts of major foreign green energy companies.
Congressional investigators reviewed Section 1603 of the 2009 stimulus, a $16 billion green energy grant program, and found that a quarter of the money went overseas. The Congressional Research Service found that, overall, the program supported about 8,000 permanent and temporary jobs at a cost of $1.2 million each.
“[T]he Section 1603 grants have only served to reinforce existing trends supporting the global dominance of non-U.S.-based competitors in the renewable energy markets,” the House Energy and Commerce Committee report says.
That’s not the result Obama has promised when praising his green energy initiatives. “I’m not going to . . . cede our position to China or Germany or all the other competitors out there who are making massive investments in clean energy technology,” the president said last year. “I refuse to see us stand by and not make the same commitment.”
For instance, over $1.7 billion of taxpayer money went to the U.S. subsidiary of Iberdrola Renewables, LLC, which describes itself as “Spain’s number one energy group” in relation to various green energy projects in the United States. Another $576 million went to the North American branch of E.ON AG, a German energy company.
“With $16 trillion in debt, we cannot afford to send one out of every four taxpayer dollars overseas for a program that has failed to create the jobs promised,” committee chairman Fred Upton, R-Mich., said in a statement on the report.
The Energy Department disputes the report, arguing that the figures provided by the lawmakers can’t be verified because of the way the money was spent with American subsidiaries and contractors.
“All of the recipients of 1603 funds are U.S. taxpayers and all of the projects funded are located in the United States,” DOE spokesperson Bill Gibbons stated in response to the report. “Therefore, every single project that has received funds to produce clean energy generation here in the United States is directly creating investment in America and domestic jobs. That’s true for every corporate tax credit or deduction – not just the ones that our critics don’t like. As a result of this highly successful program, the domestically manufactured content of US wind power plants has risen dramatically.”
A group of Democratic senators noted in 2010 that $450 million in stimulus funding was slated to finance a West Texas project that would create 3,000 jobs in China compared to just 330 jobs in the U.S. (only 30 of those U.S. jobs were expected to be permanent).
“It is a no-brainer that stimulus funds should only go to projects that create jobs in the United States rather than overseas,” Sen. Chuck Schumer, D-N.Y., said at the time. “These wind projects have a lot of merit, but the manufacturing should be happening here, not in China.”
The Chinese company overcame such Democratic opposition to the deal by agreeing to use American-made steel to make the wind turbines in China that it would ultimately ship to Texas.
A committee aide told The Washington Examiner that Obama “has expressed interest” in extending the Section 1603 grant program, but Congress has not authorized a renewal.