Everyone from T. Boone Pickens to President Barack Obama tout the need to develop clean, efficient energy here at home. Obama campaigned on the issue, arguing that we could reduce our dependence on foreign oil while helping the environment and putting Americans to work. So it should be no surprise that spending on energy programs is a significant part of the American Recovery and Reinvestment Act. In fact, according to recovery.gov, energy-related spending in the stimulus bill exceeds $70 billion of the $787 billion allocated.
“It’s an investment that will double the amount of renewable energy
produced over the next three years,” said President Obama, who also characterized the bill as a vessel to “transform the way we use energy.”
Much of the spending will filter through the Department of Energy (DOE). At the top of the list for broad energy efficiency and renewable energy programs, including $3.2 billion for energy conservation block grants, $5 billion for the weatherization of over one million homes, $4.5 billion in federal matching funds to upgrade the nation's aging energy grid, and $2 billion in grants for manufacturers of advanced battery systems and vehicle batteries. An additional $6 billion is being made available for loan guarantees for innovative technology programs.
The funding also extends the tax credits for improvements to
energy-efficient existing homes through 2010. This tax credit is capped
at $50 for any advanced main air circulating fan, $150 for any
qualified natural gas, propane, oil furnace or hot water boiler, and
$300 for any item of energy-efficient building property.
The bill also authorizes $1.6 billion in clean renewable
energy bonds to finance facilities that generate electricity from wind, biomass, geothermal, small irrigation, hydropower, landfill gas, marine
renewables and trash combustion facilities. Other provisions authorize $2.4 billion in
bonds to finance state, municipal and tribal government programs, a three-year extension of the “production tax credit” for wind energy, and $3.4 billion for carbon capture and sequestration demonstration projects (a.k.a. “clean coal” projects).
Perhaps in response to Republican criticism that energy spending in the stimulus package would be too slow in taking effect to have any real impact on the recession, just two days after the Act was signed Energy Secretary Steven Chu announced a sweeping reorganization of the system DOE uses to disperse loans and loan guarantees.
“These changes will bring a new urgency to investments that will put Americans back to work, reduce our dangerous dependence on foreign oil, and improve the environment,” Secretary Chu said. “We need to start this work in a matter of months, not years – while insisting on the highest standard of accountability.”
Energy-related spending in the stimulus Act goes beyond the boundaries of DOE. Most notably the government’s landlord, the General Services Administration (GSA), received $4.5 billion to convert GSA facilities to High-Performance Green Buildings and $300 million to replace fleet vehicles with energy-efficient models. According to GSA figures, for every dollar they spend, 95 cents goes directly to private-sector businesses for designing, building, renovating and operating facilities.
Not included in these figures is money for repairs and modernization of facilities, including investments in energy efficiency, for the Departments of Defense, Interior, and Veterans Affairs.
Finally, $8 billion of the bill will fund new high-speed rail projects. The amounts seems large until a closer investigation reveals that one high speed rail project under review in California which would connect Sacramento to San Diego is expected to cost $45 billion. Of course, much of the construction costs is expected to be recouped from ticket sales.
After everything is said and done, about 9-10 percent of the stimulus bill was directed towards energy programs. The question remains, was it enough to get us off of foreign oil and dirty power sources? Not completely, but it is a step in the right direction. Let's hope one of the researchers receiving part of the $2 billion for electric car batteries comes up with something we'll all be driving four years from now.
Also in the series: