buy american green jobsIn the wake of a new report revealing that a clean-energy grant program in the stimulus has paid out more than $1 billion to foreign manufacturers, U.S. Senators Charles E. Schumer (D-NY), Bob Casey (D-PA), Sherrod Brown (D-OH) and Jon Tester (D-MT) urged the Obama administration Wednesday to suspend the program indefinitely until the law can be fixed so that funds only flow to projects that will create jobs in the United States.

In a letter to Treasury Secretary Tim Geithner, the senators pushed for a moratorium on all payouts from a clean-energy grant program until Congress can consider new legislation that they introduced Wednesday.

That new proposal would require that aid flow only to clean-energy projects that rely on materials manufactured in the United States and create the bulk of their jobs here at home, rather than overseas. If approved, the legislation would stop payments to projects like a controversial wind farm in West Texas that is on the verge of receiving $450 million in stimulus funds even though most of the jobs created by it will be in China.

Administration officials have said they do not have the authority to prevent that payment. If the aid goes through, it would be just the latest example of a larger trend, according to an independent report conducted last month. The Investigating Reporting Workshop found that 79 percent of the $2 billion in grants doled out by the clean-energy program in the stimulus so far went to foreign companies.

The four senators said this flow of stimulus dollars overseas must be stopped.

“It is a no-brainer that stimulus funds should only go to projects that create jobs in the United States rather than overseas,” Senator Schumer said. “These wind projects have a lot of merit, but the manufacturing should be happening here, not in China. The administration hasn’t committed to denying this project from receiving funds, so we will act instead. Our domestic clean-energy sector has the potential to emerge as a global leader and it is counterproductive to invest U.S. stimulus funds in Chinese companies rather than our own. We should not be giving China a head start in this race at our own country’s expense.”

“It’s simple: The American Recovery and Reinvestment Act should reinvest in America and help America and American workers recover,” said Senator Casey. “For example, one wind turbine manufacturer in Pennsylvania laid off workers last year because they didn’t have enough orders. Thanks to a Recovery bill project announced two weeks ago, some of those Pennsylvanians will be hired back. If we increase work orders, we can put Americans back to work.”

“We cannot sit idly by while China races to the forefront of clean energy production at the expense of U.S. manufacturing, U.S. jobs, and U.S. energy independence. And we certainly can’t shoot ourselves in the foot by helping to finance Chinese clean energy production.  Taxpayers expect the government to use their dollars to support American jobs. This legislation ensures that will happen,” Senator Sherrod Brown said.

“I voted for the Recovery Act because we need to get our economy turned around and the way we do that is by investing in infrastructure and new technologies. Supporting wind production here at home will help lead to American energy independence while creating good paying jobs,” said Senator Tester.

The $1.5 billion West Texas project took a step forward two weeks ago when the Chinese government gave it final approval. The Chinese-based manufacturer will now begin shipping foreign-made turbines to Texas this month. The project’s organizers have said since November that they will seek to defray up to 30 percent of the project’s cost, or $450 million, with funds authorized by the American Recovery and Reinvestment Act (ARRA).

Schumer has been trying to block the project from receiving any stimulus aid. In November, he sent a letter to U.S. Energy Secretary Dr. Steven Chu, demanding that the project receive no stimulus dollars unless it relied on American-built products rather than the Chinese turbines. The Energy Department responded that it was powerless to stop the project from receiving federal aid.

The project is a joint venture comprised of China’s Shenyang Power Group, a Texas company called Cielo Wind Power and the U.S. Renewable Energy Group. It would build a 648-megawatt wind farm in west Texas, covering 36,000 acres. The electricity generated by this wind farm will be enough to power 135,000 to 180,000 American homes every year.

The senators said the project was certainly worthwhile, but it should not be eligible for stimulus funds since it did not rely on U.S. manufacturing. While the project is anticipated to generate as many as 3,000 jobs in Shenyang, China—which, according to the project’s announcement, will be the main site of the wind turbines construction—its job impact in the United States will be roughly one-tenth that amount. According to the New York Times, the project will only generate 330 jobs in the United States—and 300 of those are temporary positions.

The new legislation unveiled Wednesday would make this project, and others like it that do not have a substantial job impact in the United States, ineligible for stimulus dollars.

Under the so-called “Buy American” provision contained in the ARRA, government projects financed in part by the stimulus must, with few exceptions, rely on iron, steel and manufactured goods produced in the United States. But the provision does not impose a similar requirement on private projects, such as the proposed wind farm in West Texas, that seek stimulus grants. The proposal announced by the four senators today would apply the “Buy America” standard to all renewable energy projects, no matter public or private, that seek stimulus funds. The proposal also would ensure that grant money is distributed only to renewable energy projects that preserve and create jobs in the United States.

The new push to improve the stimulus was hailed by leaders from two top U.S. manufacturing unions.

“The efforts of Senator Schumer and his colleagues will help make sure that the promise of green jobs doesn’t turn out to be just another empty promise.   Energy is critical to America’s future and we should ensure that domestic manufacturers help fuel the future development of this sector,” said Leo W. Gerard, International President of the United Steel Workers (USW).

“Stimulus money should be targeted at creating jobs here at home, not in China. We commend Senator Schumer and his colleagues for providing much needed legislation which will lead to closing the door on projects like those that led to the Texas wind farm fiasco,” said International Association of Machinists and Aerospace Workers President, R. Thomas Buffenbarger.

A copy of the senators’ letter to Geithner appears below. A version of the letter was also sent to Chu.

The Honorable Timothy F. Geithner

Secretary of the Treasury                            
1500 Pennsylvania Avenue, NW
Washington, DC 20220

March 2, 2009

Dear Secretary Geithner,

A recent report highlights the distressing fact that Recovery Act funds are being used to finance wind and other clean-energy projects that source major components and create manufacturing jobs overseas.  We propose to stop Treasury from using American taxpayer dollars to support foreign manufacturers and foreign jobs, and respectfully request that you place a moratorium on distribution of section 1603 grants until our legislation becomes law.

The purpose of the Recovery Act was to jump-start the U.S. economy to create and save jobs – American jobs.  Our bill, the American Renewable Energy Jobs Act, would do just that by amending the Recovery Act to ensure that stimulus funds are distributed only to clean-energy projects that preserve and create jobs in the United States.  The legislation also would make the section 1603 grants subject to Buy American provisions.

We are deeply concerned that the United States is falling behind our trading partners in wind and other clean-energy investment.  A February 8th report by Russ Choma at the Investigative Reporting Workshop shows that 73 percent of the $1.9 billion in section 1603 wind-energy grants distributed by the U.S. government since September 1, 2009, have gone to foreign-owned companies.  The majority of turbines purchased with that money have been built by foreign manufacturers – of the 28 wind farm projects that have received grants to date, 1219 of the 1807 wind turbines installed were built by foreign manufacturers.  Most of economic activity created by investing in wind energy comes from the turbine manufacturing, which means that the bulk of the wind-related manufacturing jobs financed by section 1603 grant money are being created overseas.  This is not the intended use of Recovery Act funds.

Our legislation would help reverse this trend by ensuring U.S. government support is focused on the domestic clean-energy industry.  Companies located in New York, Pennsylvania, and elsewhere across the United States are fully capable of manufacturing the range of clean-energy components, and U.S. wind farms and other clean-energy projects financed with stimulus money should be buying American-built parts.

A critical Recovery Act priority is investment in the domestic renewable energy industry, not investment in foreign manufacturers.  We believe Treasury has the discretion to consider domestic job preservation and creation when distributing section 1603 grants for wind and other clean-energy projects.  Grant programs by their very nature require discretion because there are limited funds available.  If Treasury chooses not to exercise its discretion, we respectfully request that you defer distribution of section 1603 grants until after our legislation becomes law.

Thank you for your time and attention to this important issue.

Sincerely,

Charles E. Schumer, United States Senator

Robert P. Casey, Jr. , United States Senator

Sherrod Brown, United States Senator

Jon Tester, United States Senator

© 2010, Tracey de Morsella. All rights reserved. Do not republish.

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Author: Tracey de Morsella (323 Articles)

Tracey de Morsella started her career working as an editor for US Technology Magazine. She used that experience to launch Delaware Valley Network, a publication for professionals in the Greater Philadelphia area. Years later, she used the contacts and resources she acquired to work in executive search specializing in technical and diversity recruitment. She has conducted recruitment training seminars for Wachovia Bank, the Department of Interior and the US Postal Service. During this time, she also created a diversity portal called The Multicultural Advantage and published the Diversity Recruitment Advertising Toolkit, a directory of recruiting resources for human resources professionals. Her career and recruitment articles have appeared in numerous publications and web portals including Woman Engineer Magazine, Monster.com, About.com Job Search Channel, Workplace Diversity Magazine, Society for Human Resource Management web site, NSBE Engineering Magazine, HR.com, and Human Resource Consultants Association Newsletter. Her work with technology professionals drew her to pursuing training and work in web development, which led to a stint at Merrill Lynch as an Intranet Manager. In March, she decided to combine her technical and career management expertise with her passion for the environment, and with her husband, launched The Green Economy Post, a blog providing green career information and covering the impact of the environment, sustainable building, cleantech and renewable energy on the US economy. Her sustainability articles have appeared on Industrial Maintenance & Plant Operation, Chem.Info,FastCompany and CleanTechies.

  • http://www.walcotool.com Karen Schultz

    Please understand that the US educational system does not support the talents in education for machinists (not operators) and metallurgists, casters, as well as, forgers to grow our businesses to support manufacturing in the US for everything we need. First, make sure every community college is funded for manufacturing hard skills to equip the manufacturers to grow. The lack of people with high level machining skills (not operators) to make the demanding OEMS that need our services in the US. Not many can do what a job shop can perform…and not all job shops can supply parts at the same level of need for US product. Designers have to understand machining and manufacturing to understand the costs they impose on job shops to help their businesses be more profitable. Purchasing agents with good technical background are hoping job shops can understand the parts they are outsourcing for not always realizing what they are asking for and best processes available where pricing can make a difference or not. Connectivity and relationship building is more important in the job shop supply chain as hidden knowledge is lost in the changing of the guard. It is not as easy as some people want it to seem. Step one is get community colleges on line and hope you can find the teachers to teach the skills needed.
    Karen Schultz

  • http://www.in.linkedin.com/in/ketangandhi KGGURUJI

    Protectionism v/s. globle competition has been an age old issue. Success of any wind energy project depends on Internal rate of return (IRR) and NPV (net present value) of whole project. Wind Turbine cost is the major input cost for the project. For any investor of wind farm obvious comparision is wind turbine cost comparision from all global suppliers and selecting the best one who provide value for money. Instead of blocking funds and in turn obstructing projects, root cause analysis should be done is why local companies and their manufactured wind turbines are not best technology, most cost competitiveness? US has installed more than 10000 MW two times in last 3 years, where as total manufacturing capacity of wind turbines are less than 3000 MW locally, hence remaining 7000 MW are bound to come from overseas.Also an analysis about why all 10000 MW is not produced locally, obviously because factories take time to establish and unless there is consistent long term renewable energy policies like PTC or other fiscal incentives etc.wind turbine company is not ready to invest in large capacity with a simple reason is it might be idle in future if governmetn policy changes. Such stoppages have adverse impact and send wrong signals. Keeoing USA’s visi0n 2025 of 25% electricity from renewable energy by 2025 long term horizon steps are required in following areas (1) Education system as suggested by Karen Schultz (2) Long term renewable energy policy and clear targets (3) Encourage investments in building plants for wind turbines and their components (4) Research and devepment to develop low cost, high efficiency technologies to reduce wind turbine capital cost (5) Busine excellence programs and change management for local companies to become global competitive in terms of cost, quality, delivery lead time and services (6) New vision for renewable sector companies and their component manufacturers (7) Offshore wind turbine market is in initial development stage, let USA based local companies take lead in offshore turbines and wind global market. etc.

    Protectionism has it’s own dis-advantages and the major dis-advantage is it stops companies becoming innovative. It has some short term gains. Look at examples of many countries where till 1980/1990 there was such protectionism and those countries have not grown. As soon as markets open for global compatition growth start shooting to 9 to 10% per annum.

    Ketan Gandhi
    President & CEO
    KgGuruji Consulting & Services

  • http://www.politicalplaques.com Bill

    Tell me again how buying foreign products helps America?