Administration officials were on Capitol Hill yesterday to celebrate stimulus funding for green energy. However, previous Investigative Reporting Workshop articles found that as much as 80 percent of the money from a direct cash grant program that rewards developers of renewable energy facilities went to foreign companies – and they in turn were buying mostly foreign-made turbines.

But Matt Rogers, the top stimulus advisor for the Department of Energy, told members of Congress that the program has been a huge success. How huge? Cash grants totalling $3.1 billion under the program so far, he said. And, he said, the program, known as Section 1603 grants, hasn’t just been successful at giving away money, it’s been a successful job creation program.

“Tax programs are not actually required to report into federalreporting.gov, but the 1,603 recipients reported that these projects created 12,000 jobs last year, and if continued as expected would create 60,000 jobs across the life of the program,” he said.

As Rogers acknowledges, these are self-reported numbers by the very companies who are reaping billions of dollars in taxpayer money. If taken at face value, 12,000 jobs is a good thing – but going beyond face value: Rogers testified that 10,000 of those jobs created last year were in construction, and only 2,000 were in ongoing maintenance and operations. A job is a job in this economy, and wind construction jobs pay as well as any other construction job, but, on average, they only last nine to 12 months.

Assuming that all of the work done on wind farms that received cash grants under the stimulus was done last year (and not previously), many of those jobs don’t exist anymore. Knowing that much of the work happened well before the grant program started handing out money in September, and even before the stimulus bill was passed last February, it’s safe to say most of those jobs don’t exist anymore.

WAS IT REALLY THAT STIMULATING?

The wind energy industry denies the fact that much of the work was done well before the money started flowing – at issue because when the cash arrives in a recipients account it comes with no strings obligating future investment in the U.S. – and Rogers tried to downplay that fact by pointing to a review of the grant program (pdf) done by the DOE’s Berkeley National Laboratory. The report, which did find the program had some stimulative effect (and didn’t seem to be suffering too much fraud involving applicants claiming facilities worked when they did not), estimates that without this particular grant program about 2,000 megawatts of wind energy would not have been installed.

But, the same report finds, about 3,700 megawatts of wind energy were installed that would have been installed anyway.

In response to the Investigative Reporting Workshop’s articles, the report also looks into domestic job creation and found that the grant program “has supported about 62% of the maximum number of (short-term) job-years that it could have possibly hoped to support.” Putting aside the report’s assumption that 60 percent of turbines installed under the project are domestically made (even industry lobbyists only claim “nearly 50 percent” of turbine component value is made in this country), 62 percent still works out to a grade of “D”

EVEN MORE MONEY HEADED TO GREEN ENERGY

But one of the most interesting details slipped into Rogers’ testimony was not his spinning of how well the $3.1 billion grant program has worked so far, but how much bigger it’s going to get. When the program was announced Sept. 1,  Rogers and a Treasury official told reporters it was a $3 billion program – with the potential to expand if it was successful.

According to Rogers, the program is now expected to dole out, “an estimated $16 billion in renewable energy generation payments-in-lieu of tax credits.”

Cross-posted at “Shop Talk”

A turbine at the Meadow Lake Wind farm in Indiana, via Flickr user vaxomatic

Today is the one-year anniversary of the stimulus bill’s passage and all this week we’ll be blitzed by administration officials touting the bill’s success. But in at least one key area – green energy – an investigation we put together at the Investigative Reporting Workshop found that everything the administration promised (or is now claiming) … is not necessarily true.

The legislation, cobbled together in just three weeks last February, was promised to create millions of good American jobs. Yet our investigation found that at least 80 percent of the more than $2 billion given away under just one green energy program has ended up with foreign companies. If you’re with a news organization and the story sounds like it could be of interest to you, the Workshop is an “open-source” news organization, with our content free for you to use (check below the jump for details).

For everyone: the details of what this story means and why it matter can be found on the IRWorkshop Web site with my articles on:

• “Renewable energy money still going abroad, despite criticism from Congress”: the mainbar where we break down the grant progam, how it works, who has benefitted (the single largest grant was to a bankrupt Australian firm that was awarded $178 million for a Texas wind farm built with Japanese-made turbines.)
  • One of several amazing things about this program is that the administration has little or no control over who gets the money or what it’s used for. The grants reimburse companies for 30 percent of their investment into a renewable energy facillity – one that is already completed. Unlike other stimulus programs, even other green energy stimulus programs, there is no need to prove job creation or promise to reinvest the money in the U.S.
  • Just as important as who gets the money, is how they spend it. So, we also investigated the source of the turbines used in many of these projects. Despite the administration’s claims that all of the money from the program has gone to supporting U.S. jobs, we found that of the 1,807 wind turbines erected on projects under this grant program, 1,219 of them were built by foreign manufacturers. We even went so far as to track shipments of wind turbine components to get a better picture of where the jobs are really being created.

• “Foreign companies control wind manufacturing“: After our first investigative article on the subject was published in October (see here) when we reported similar (albeit lesser) findings, we were asked to clear up whether we were talking about foreign-manufacturing or domestically-based, foreign-owned manufacturing. So we broke it down and outlined who makes what and who imports what else from which countries.

We did this investigation in partnership with our fellow non-profit investigative reporters at the Watchdog Institute in San Diego, who saw their So-Cal focused version of the story appear in the San Diego Union Tribune. We also worked in coordination with ABC News’ World News Tonight with Diane Sawyer, who produced their own excellent report that was broadcast last Tuesday. Video of their broadcast, reported by the talented Jon Karl, is on YouTube.

More information on the Workshop is below the jump.

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