Green Stimulus Jobs Go to China Instead of US Workers

[Pangloss]

The administration is coming under fire from fellow Democrats over this one, not just Republicans, but Congress may be as much to blame as the administration. Apparently nobody thought to put in language that ensures that the stimulus money that was slated for "green jobs" be spent on American workers (which was, of course, the whole point).

 

Here are some articles on this:

http://abcnews.go.com/WN/wind-power-equal-job-power/story?id=9759949

http://www.signonsandiego.com/news/2010/feb/09/foreign-energy-firms-getting-windfall-of-us/

 

It's not just a matter of big projects needing parts that are only made overseas -- I think people could understand that you might need a few laptops to get a job done, but that's not what's at issue here. The West Texas project mentioned in both articles will employ 300 Texans for construction of wind turbines, sure, but it's going to employ 2000 Chinese to actually build the turbines. American companies make wind turbines too, but apparently those turbines are more expensive. But is that actually relevant here? Isn't the point of the bill to stimulate jobs and American green companies?

 

An administration official acknowledged the criticism today but rejected making changes to the legislation, apparently because it will cause too much of a delay. But in the case of wind energy one analyst says that 80% of the stimulus money spent on wind energy is going overseas!

 

What do you all think?

[npts2020]

That is what happens when you give money to mutinational corporations instead of small businesses. I don't see why anyone should be surprised by this.

[Phi for All]

Apparently nobody thought to put in language that ensures that the stimulus money that was slated for "green jobs" be spent on American workers (which was, of course, the whole point).

This kind of mistake happens too often for it to be coincidence. I'm reminded of the lack of restrictions on the banking bailout. I think economic stimulus legislation in the hands of politicians equals profits for the Big Business Party.

[swansont]

I think it's a sham argument. You can't buy something that doesn't exist.

 

The article mentions that there are only two manufacturers in the US, and that even they do the bulk of their manufacturing overseas. The government has done precious little to encourage the buildup of this kind of infrastructure until recently, so it's really no wonder as far as I'm concerned.

 

 

From the second link:

Chu responded on Facebook: “But manufacturers will not build plants here and grow their production capacity here unless there is domestic demand; and, until recently, that was not the case.”

 

…

 

Two main U.S. manufacturers, GE Energy and Clipper Windpower, either did not make a turbine the size that Cannon wanted or were sold out.

 

Bingo.

 

Pure political posturing on Schumer's part.

[Phi for All]

The government has done precious little to encourage the buildup of this kind of infrastructure until recently, so it's really no wonder as far as I'm concerned.

So we have a chance for the government to place effective subsidization that could help build a sustainable infrastructure for wind power, but we're sending the bulk of it overseas, while oil, sugar, corn and many other industries continue to receive government subsidies ad infinitum.

[swansont]

So we have a chance for the government to place effective subsidization that could help build a sustainable infrastructure for wind power, but we're sending the bulk of it overseas, while oil, sugar, corn and many other industries continue to receive government subsidies ad infinitum.

 

We could have done so, but it takes years to build that up. The idea of stimulus was that it would add or preserve jobs in industry that was under capacity, which is not the case for the wind turbine industry.

 

In the longer run, the government could put such incentives in place to do that. I know of at least one foreign solar company that announced plans to build a US manufacturing plant, in case any solar subsidies require domestic production. I wonder if ending other subsidies would help as well, since the goal is to make the newer, greener production methods more competitive while they mature, and ending oil and ethanol subsidies would be cheaper, though politically more difficult to do.

[Pangloss]

We could have done so, but it takes years to build that up

 

So build it up. If we accept the premise that the point of this spending was to create jobs in the US and stimulate green companies in the US, what difference does it make how many windmills actually appear on the landscape? If at the end of the day you're 50% closer to being able to build windmills, and you've employed 50 people in the process, then you've accomplished the goal of the project. The fact that you can't do the pretty windmill photo op is irrelevant.

[swansont]

So build it up. If we accept the premise that the point of this spending was to create jobs in the US and stimulate green companies in the US, what difference does it make how many windmills actually appear on the landscape? If at the end of the day you're 50% closer to being able to build windmills, and you've employed 50 people in the process, then you've accomplished the goal of the project. The fact that you can't do the pretty windmill photo op is irrelevant.

 

It's not irrelevant, since it's one of the goals — to generate green energy. So actually building and installing the wind turbine, sooner rather than later, matters. But Sen. Schumer is complicit in the failure to have built up the demand, so that there would be industrial capacity, and also complicit in failing to put wording into the package to require US manufacturing. So to complain about it is just grandstanding.

[bascule]

This all seems strange to me as I'm located right next to NREL and there's a huge farm of experimental windmills south of town that I go by every day.

 

I agree: stimulus monies to be kept in the US. This was a gross oversight.

[Pangloss]

It's not irrelevant, since it's one of the goals — to generate green energy.

 

Well IMO the goal was to promote green industry in the United States. But I can't fault you for being skeptical about the motives of Chuck "I Killed Indymac" Schumer.

[swansont]

Well IMO the goal was to promote green industry in the United States.

 

The section is called (in part) "rapid deployment of renewable energy," so I think one has to acknowledge that rapid deployment of renewable energy was one of the goals of the package.

 

Promoting the industry was one intent, but they fumbled it. There is a deadline for the projects of starting construction NLT September 30, 2011. So you really have to have the turbines by then. I don't know if you could build a turbine factory in that time.

[ecoli]

Why does it matter where green tech comes from? Job creation is not zero sum.

[npts2020]

The section is called (in part) "rapid deployment of renewable energy," so I think one has to acknowledge that rapid deployment of renewable energy was one of the goals of the package.

 

Promoting the industry was one intent, but they fumbled it. There is a deadline for the projects of starting construction NLT September 30, 2011. So you really have to have the turbines by then. I don't know if you could build a turbine factory in that time.

 

How many years did it take to build up industrial capacity for WW II? The Sept. 30, 2011 deadline is artificial and can be changed by an act of law at any time, especially if it will not take much longer. There won't be that much production till close to the deadline anyway IMO.

[swansont]

How many years did it take to build up industrial capacity for WW II? The Sept. 30, 2011 deadline is artificial and can be changed by an act of law at any time, especially if it will not take much longer. There won't be that much production till close to the deadline anyway IMO.

 

Years?

 

Yes the deadline can be changed, but you are changing the conditions. For the money that has been disbursed, that is the deadline that is in place.

[Pangloss]

The section is called (in part) "rapid deployment of renewable energy," so I think one has to acknowledge that rapid deployment of renewable energy was one of the goals of the package.

 

Okay, then it's a valid point, I agree.

[npts2020]

Years?

 

Yes the deadline can be changed, but you are changing the conditions. For the money that has been disbursed, that is the deadline that is in place.

 

That's the point. If it is deemed necessary, industrial production in America can be stepped up relatively quickly. Those who run the world, have just decided that it is not desirable (for whatever reason) to do this. I was unaware that there was any windmill producers that had that much extra unused capacity, anyway, so wherever they are going to be produced is going to require major investment in expanding operations. Are the Chinese really that much more adept than we are at getting the manufacturing process going? Rapid deployment of alternative energy sources is a great idea, IMO, but how is that going to help our economy if we just import everything?

[JohnB]

I wonder who owns the chinese companies?

[swansont]

That's the point. If it is deemed necessary, industrial production in America can be stepped up relatively quickly. Those who run the world, have just decided that it is not desirable (for whatever reason) to do this. I was unaware that there was any windmill producers that had that much extra unused capacity, anyway, so wherever they are going to be produced is going to require major investment in expanding operations. Are the Chinese really that much more adept than we are at getting the manufacturing process going? Rapid deployment of alternative energy sources is a great idea, IMO, but how is that going to help our economy if we just import everything?

 

"Years" is not quickly on the timeline of the legislation, though.

 

There isn't anything in those stories that implies that the turbine and blades are being supplied by foreign capacity that has been recently added (i.e. after the passage of the legislation).

 

These analysese says that there is currently overcapacity of wind turbine production in China, because the industry has been growing their businesses for the last 4 or so years. The third link tabs the current utilized capacity at 50%

http://seekingalpha.com/article/143682-a-power-energy-generation-systems-headwind-or-tailwind

http://steelguru.com/news/index/2009/11/25/MTIyMjQ3/China_wind_power_industry_faces_overcapacity.html

http://techpulse360.com/2009/12/30/overcapacity-in-china-could-lead-to-cheap-solar-cells-and-wind-turbines/

 

 

This isn't surprising; it's happening in the solar industry as well. Many companies stated up and expanded capacity when prices were high several years ago and demand exceeded supply, but now all of those plants come online and there is overcapacity. But again, it took a few years for this to happen.

 

The reason that foreign manufacturers have been stepping up production is that it's cheaper, in general, to produce there and the demand hasn't been in the US. No incentive to ramp up production here until this windfall, and with such a short time horizon, impossible to do so while the money is available.

[npts2020]

Even if they are only operating at 50% capacity as claimed, it seems to me that production will need to be scaled up somewhere to meet expected demand. I say more power to our future Chinese overlords and apparently those who control the manufacturing agree. It is not like we are going to have anywhere close to the amount of wind power we should have within the next two years, anyway, even if we max out their production.

[swansont]

I agree. If governments would commit to it through various means, then companies will have the confidence the demand will be there and expand their capacity. But it needs to be a long-term commitment, not something that might expire just as the shiny new plant comes on line.

[npts2020]

I agree. If governments would commit to it through various means, then companies will have the confidence the demand will be there and expand their capacity. But it needs to be a long-term commitment, not something that might expire just as the shiny new plant comes on line.

 

I am proud to agree with you.

[bascule]

Why does it matter where green tech comes from? Job creation is not zero sum.

 

I think it's because the primary intent of the stimulus is to create domestic jobs and strengthen the domestic economy. Accomplishing the tasks the money was actually budgeted for is secondary.

 

Hiring people to dig ditches and then fill them back in as part of the New Deal didn't accomplish a lot, but it got people working again and becoming active participants in the economy.

[Mr Skeptic]

But Sen. Schumer is complicit in the failure to have built up the demand, so that there would be industrial capacity, and also complicit in failing to put wording into the package to require US manufacturing. So to complain about it is just grandstanding.

 

Well, there's grandstanding and there is ripping off the American public. They're not mutually exclusive. If the primary goal of the legislation was to build green jobs in the US, then we've been ripped off by sending the money to China. If the primary goal was to reduce our dependence on fossil fuels right now, this is just the most cost-efficient way to do it.

 

Either way, it is our two party system that makes politics a two player mostly zero sum game, which is why even silly grandstanding is nevertheless effective. (your loss is my gain)

[swansont]

Well, there's grandstanding and there is ripping off the American public. They're not mutually exclusive. If the primary goal of the legislation was to build green jobs in the US, then we've been ripped off by sending the money to China. If the primary goal was to reduce our dependence on fossil fuels right now, this is just the most cost-efficient way to do it.

 

In that view, then, isn't Schumer (partly) responsible, since he signed off on the legislation? And didn't do his homework on the details?

[bascule]

If the primary goal of the legislation was to build green jobs in the US, then we've been ripped off by sending the money to China.

 

In my mind the primary goal of the legislation was job recovery and stimulating the domestic economy, so sending the money off to China does not accomplish those goals.