Mackinac Center: Green energy rules and subsidies fizzle as job creators

Mackinaw City Michigan Giant Turbines just outside Mackinaw city
Mackinac Center: Green energy rules and subsidies fizzle as job creators Detroit Free Press freep.com

The national unemployment rate remains stubbornly above 9%, and Michigan's unemployment rate remains in double digits. Some in the political class, both in Washington and Lansing, tell us the way out of this economic malaise is to embrace the vision of green energy and its promise of new jobs. Unfortunately, this is wishful thinking.

The green energy jobs bubble is deflating rapidly and turning red as taxpayers are saddled with excessive new debt fueled by government's attempt to pick winners and losers in the energy markets. The poster child is Solyndra, a manufacturer of solar power products that squandered more than $500 million of taxpayer money before closing its doors.

Government officials have been busy centrally planning our energy future by using CAFE standards to mandate the types of vehicles we drive, dictating the types of light bulbs we can use, and attempting to regulate coal-fired power plants -- which provide about 60% of the nation's electricity -- out of existence through EPA administrative fiat.

Government officials have also handed out billions of taxpayer dollars in subsidies, loan guarantees and tax incentives to industries du jour, like solar panels, windmills, ethanol and "green" automobiles.

Government intrusion has not delivered the promised jobs. The U.S. Labor Department's Office of Inspector General recently reported that the federal government spent $162.8 million to "train and prepare individuals for careers in green jobs." Only 8,035 Americans found jobs, according to the report, and "only 1,336 were still in the job after six months."

Government attempts to create green jobs in Europe have proved to be just as expensive and actually resulted in a net loss of jobs in Spain, a country with 20% unemployment.

While government officials have been planning our energy future, the private sector has been busy creating a revolution in the oil and gas industry. Two of the most important developments are the extraction of extensive deposits of natural gas in the U.S. through the use of hydraulic fracturing and horizontal drilling technologies, and the development of huge supplies of oil derived from oil sands in Canada.

It is estimated that there is enough recoverable natural gas in the U.S. to provide the nation's energy needs for the remainder of the century. Construction of a pipeline running from Canada to American refineries would reduce the amount of oil imported from the Middle East.

Many environmentalists oppose developing these new energy resources, claiming they pose an unacceptable threat to the environment. These claims hide the fact that they recognize the development of oil and gas undercuts the rationale for more costly alternative energy sources.

Policymakers who champion alternative energy through government mandates and lavish tax subsidies are ignoring economic realities. Their agenda will actually harm the development of alternative energy in the long run.

We did not leave the Stone Age because we ran out of rocks. We won't leave the age of carbon-based energy because we ran out of oil and gas. Rather, we will organically transition to new energy sources when supply and demand makes oil and gas production more expensive than alternative forms of energy. No amount of government intervention can suspend economic laws.

Federal and state government policy should encourage the responsible development of oil and gas resources in North America -- which will create thousands of good-paying jobs -- while at the same time allowing private research into new alternative energy technology that will provide the bridge to America's energy future.

Russ Harding is senior environmental policy analyst at the Mackinac Center for Public Policy.