Renewable policy and jobs: Testimony of Robert J. Michaels
Dr. Michaels' testimony before Congress concerning the economics that underlies H.R. 2915, and the consequences of repealing the Western Area Power Administration’s (WAPA) $3.25 billion borrowing authority under The American Reinvestment and Recovery Act of 2009. His testimony explains the realities of renewables as a source of job creation.
The summary/conclusions of Dr. Michaels' testimony is excerpted below. His full testimony with graphics can be accessed by clicking on the link(s) at the bottom of this page.
Summary and Conclusions
The reality of most renewable electricity, particularly from intermittent sources, is easy to summarize. It is expensive, undependable and environmentally problematic. Some renewables such as biomass and geothermal are exceptions, often capable of passing market tests that wind and solar cannot. Unchallenged data from the Energy Information administration show that the subsidies per kwh actually generated by wind and solar power are over 80 times those received by non-nuclear conventional sources, and over 15 times those for nuclear power. Most subsidies to wind and solar are politically-inspired wealth transfers, rather than tools to incentivize improvements in their competitiveness. In all but the most extreme scenarios, the Department of Energy projects that they will be uncompetitive with conventional resources, even if carbon policies come into being.
The economic theory behind claims that renewables will increase employment applies (if at all) to an economy that hardly resembles today's. Advocates of job creation almost invariably fail to note the concomitant destruction of jobs in industries whose products are no longer bought because consumers must pay taxes or higher prices for the renewable power. The National Renewable Energy Laboratory's models of job creation are curiosities devoid of policy relevance, mathematically structured to render any possible job destruction an impossibility. Even if we only look at jobs in renewables, their impacts on employment are minimal. The Brookings Institution estimates slightly over 80,000 renewable energy jobs, many of which are short-term construction work. The millions of "clean" or "green" jobs mentioned in the media are overwhelmingly positions that would be filled even if all renewable electricity vanished -- bus drivers, refuse workers, and some building trades, to name a few. Calling these workers part of the "clean" economy can only mislead the public about the likely effects of energy and climate policy.
Any choice by government to financially support one energy source over another is by definition an exercise in picking winners. All too often such spending generates forces that make it very difficult to abandon the non-winners. The stories of synfuels and ethanol are back today in wind and solar power, which have many friends in Washington. Whatever happens there, the real future of energy has already arrived, and the winner was picked by the market, with virtually no help from the District of Columbia. Independent risk-takers devised ways to access shale gas for the simplest of reasons - there was profit to be made by alleviating a scarcity of conventional gas. Shale is competitive on costs, compliant with environmental rules and in the main within state jurisdiction, under which it is producing prosperity. The jobs shale creates are the kind that have always powered the country, and their finance comes from the voluntary savings of households and businesses. The nation is looking at centuries of low-cost, clean, secure fuel that creates the kind of jobs that are really worth creating - in the making of goods and services that people voluntarily trade because doing so makes both sides better off. Wind and solar largely exist because government can coerce payments for them.
The subject matter of this hearing is a seemingly minor provision in a far larger and more pervasive law. ARRA and many other recent laws contain language that prioritizes facilities associated with renewable power in ways that I believe are unwarranted. This testimony has summarized some facts about renewable energy in order to shed light on its true costs, benefits, and labor market effects. These facts clearly show that this committee must rethink ARRA's statement that WAPA pay particular attention to renewable energy. I am not testifying about the organization or performance of WAPA, or about the costs and benefits of any specific transmission project. Rather, I am stating that power from renewable sources should compete for transmission resources on the same terms as power from conventional ones.