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The Clean Energy Recovery: Creating Jobs, Building New Industries and Saving Money

The Clean Energy Recovery: Creating Jobs, Building New Industries and Saving Money


[Official GPO Transcript] [The Chairman] I think it is appropriate to begin this hearing
today on the Recovery Act with a reflection on where
our Nation stood 1 year ago. Our economy was in a free fall.
The Dow was below 6500, down 54 percent from its high. Less
than 2 months into the Obama administration, unemployment had
already hit a 25- year high. People stopped looking at their
401(k) statements, spending froze, businesses shuttered, credit
disappeared, and everyone wondered when the downward spiral
would end. While the Nation’s collective economic security
was disappearing before our eyes, many of the
pillars of American strength have been quietly decaying in the
shadows for decades. Roads and infrastructure were crumbling, schools
were sinking deeper into mediocrity, our middle class was
losing ground. At the same time, China, Germany, and other nations
were racing past us in the 21st century’s greatest growth
industry, clean energy. Amidst this storm, Congress passed the American
Recovery and Reinvestment Act; and it became law on
February 17, 2009. As a result, two million people have jobs
today that otherwise would not. This emergency legislation has
not only helped us round the corner on the worst recession in
generations, it has become the catalyst for reinvesting in America’s
future. Nowhere is this reinvestment more apparent
than in clean energy, where the Recovery Act targeted $90
billion to jump- start jobs in efficiency, wind, solar, advanced
battery technology, and countless other critical industries. Equally important, these investments are laying
the foundation for a new era of innovation and
technology development that will provide the next generation
of Americans with economic security and job opportunities
over the long term. While we still have a long journey ahead of
us, I think we need to take stock of how far we have come
with the Recovery Act. A decade ago, we had a grand total of 450
megawatts of solar electricity installed in the United
States. Flash forward. We installed 480 megawatts of solar
in 2009 alone. In 2010, the solar industry is likely to bring
on line the likely equivalent of a nuclear power plant. Solar
energy programs in the Recovery Act supported more than 10,000
new jobs in 2009, and it is likely to support another 30,000
in 2010. Then there is wind. Four years ago, 25 percent
of the components of a wind turbine was made in America.
Today, more than 50 percent is made in America. Annual
additions of wind power have quadrupled during that time, from
less than 2,500 megawatts in 2005 to nearly 10,000 new megawatts
installed in the United States in 2009. When the wind factories
supported by the Recovery Act come on line over the next
couple of years, the average content is likely to be over 70
percent in these wind facilities. Then we have the advanced batteries that are
going to power the electric vehicles rolling off assembly
lines later this year. Asia owns 98 percent of that market
today. With Recovery Act investments, the U.S. global markets share
is projected to raise to 20 percent next year and 40 percent
by 2015. Imagine the jobs that will be created when we stop
sending $250 billion a year overseas for oil and start sending
money to the workers in Michigan and Ohio who are building our
electric batteries. Make no mistake, clean energy industrialization
is happening in America, and the Recovery Act is playing a
major part. Public investment in innovation is a proven
all-American pathway to long-term economic security and
job creation. The public investment behind Neil Armstrong’s
one small step spurred giant technological leaps that ensured
American economic security for generations. The Recovery Act reoriented America to the
future and refocused our efforts and our strengths. Our
strength is our ability to innovate. As we move forward into
a clean energy future, we will wean ourselves from our greatest
weakness: addiction to oil. The Recovery Act laid that
foundation. A long-term policy like the Waxman-Markey bill,
which the House passed last June, will ensure that the thousand
flowers of the Recovery Act are likely to fully bloom. That completes the opening statement of the
Chair. I now turn and recognize the ranking member
of the committee, the gentleman from Wisconsin, Mr.
Sensenbrenner. [Mr. Sensenbrenner] Thank you very much, Mr.
Chairman. You never have to admit you are wrong if you
always argue that things could be worse. The unemployment
rate is hovering around 10 percent, and the economy has lost
around 3.3 million jobs since Congress passed the $862 billion
stimulus bill. But the majority has still convened today’s hearing
to celebrate the bill as a success. No matter how sluggish
our economy gets, they always can pretend that things are better
than they could have been. I am still hopeful that last year’s $862 billion
stimulus bill will help get people back to work. But
this is mostly wishful thinking. Evidence already shows that
this massive government program is unlikely to produce
any significant growth in the workforce. There are good intentions
behind some of these so-called green jobs projects, but
we also need accountability. The stimulus program was a failure, and we
need an honest accounting as to why. Spending government money can create jobs,
but most of these jobs are entirely dependent upon the
government’s subsidies. Take away the subsidy, the job
goes, too. Based on per unit of energy output, wind and solar
energy products received 50 times more subsidy than coal.
The subsidies required to create these green jobs result
in the loss of economically sustainable jobs in other industries.
Experiences abroad have already documented this fact. Spain spent $1.6 billion to subsidize its
solar industry. A study from a Spanish university, however,
found that for every job this money created, it cost the economy
2.2 jobs in other industries. The same study also found that
9 out of 10 jobs created by the subsidies were temporary in
nature. The Obama administration immediately attacked
the study, but critics must account for the fact that,
since implementing the subsidies, the unemployment rate in Spain
has climbed to nearly 20 percent. I know the playbook is
to argue that things would have been worse without the subsidies,
but when one in five people are unemployed, how much worse
can it get? The administration was so frightened by the
Spanish statistics that it took what the Department
of Energy employees described as an unprecedented step of issuing
a direct rebuttal. DOE contracted with a national renewable
energy lab to produce a response to the Spanish study.
Documents obtained through a FOIA request by the Competitive
Enterprise Institute made it clear that the administration’s rebuttal
was written in conjunction with wind lobbyists and other
advocacy groups. This blatant conflict of interest not only undermines
the integrity of NREO’s attack but also exposes the agenda
of the report sponsors. Unfortunately for us, the stimulus bill might
actually be of some help to Spain. The Investigative Reporting
Work, a product of the School of Communication of
American University, found that a majority of the program’s grants
went to foreign- owned companies and that a majority of the
turbines purchased with the money were built by foreign manufacturers.
The workshop found that of the $1.05 billion in
clean energy grants handed out by the government since September
1, 84 percent–a total of $749 million–have gone to foreign
wind companies. The Spanish utility company Iberdrolla, SA, alone
has collected $545 million through its American subsidiary. In response to a letter from Democratic Senators
criticizing the stimulus program, Secretary Chu wrote that all
the wind turbine installation jobs are created here in America.
So we are spending U.S. taxpayer money to create long-term
manufacturing jobs abroad and consoling ourselves because we
are also creating a few short-term construction jobs here at
home. The job creation benefits of the stimulus
package were further undermined by the Democrats’ political
alliance with unions. The Government Accountability Office
recently found that the pro-union Davis-Bacon language in
the stimulus bill meant Energy Department officials have to
spend valuable time determining the prevailing wages for these
so-called green jobs. This bureaucratic exercise cost valuable
time during a period where many Americans needed the work. In the case of weatherization, the Energy
Department spent only 8 percent of the nearly $5 billion budgeted
to improve energy efficiency in homes across the country.
Indeed, a study by the Heritage Foundation shows that Davis-Bacon
rules require government contractors to pay wages that average
22 percent above the market rate, and suspending Davis-Bacon
rules would let the government hire 160,000 additional
workers. I am glad that Brian Johnson of Americans
for Tax Reform is here to tell us more. He will testify that
Davis-Bacon rules reduced the jobs-creating benefits that the
stimulus bill sought to create. The question is what are
the priorities of the authors of the stimulus bill. I also want to welcome Mary Ann Wright of
Johnson Controls, who are based in my district, and thank her
and her company for their work in cutting-edge battery power.
I believe the only way we can confront climate change is through
technology breakthroughs, and I am in fact a lead author
and original sponsor of the Hybrid Truck Act, which has
twice passed the House. I hope this hearing proves to be the beginning
of legitimate oversight, rather than an attempt
to spin ineffective policies. I yield back the balance of my time. [The Chairman] The gentleman’s time has expired. The Chair recognizes the gentlelady from South
Dakota, Ms. Herseth Sandlin. Ms. Herseth Sandlin. I thank the chairman
for holding this hearing giving us this opportunity
to examine how the Recovery Act has played a key role in maintaining and
fostering the new energy economy. I supported the Recovery and Reinvestment
Act in order to prevent the worst recession since World War
II from lasting longer and going deeper, to build infrastructure
and invest in other ways in the future of South Dakota and
the country. As an example, South Dakota has already been
allocated $9.6 million in Recovery Act smart grid funding,
Batros Power in the western part of the State is slated to receive
$5.6 million in Recovery Act funds, with 50 percent cost share
to install smart metering technology, and Sioux Valley Energy
Electric Cooperative was awarded $4 million to install
SMART meters. As virtually every economist agrees, we needed
an aggressive recovery package to stem the loss
of jobs, to save jobs, to create jobs, and to reinvigorate
demands for goods and services that had evaporated in the economic
collapse triggered by the financial meltdown originating from
risky and unconscionable actions on Wall Street. Our
Nation was in a free fall, losing hundreds of thousands of jobs
a month, and we needed to act. As South Dakota’s Republican
governor has said, the Recovery Act played a key role in balancing
South Dakota’s budget in multiple years, while reducing cuts
to critical programs as our State suffered from the downturn. Moreover, one of the key components of the
Recovery Act conveniently overlooked by its critics is
over a third of it is tax cuts for families and businesses, including
a long-term extension of the production tax credit for
wind through 2012, a tax credit of up to $800 per family for 2009
and 2010, tax relief for small businesses, and a cut in
the capital gains tax for those who invest in small businesses. In addition, I have met with homegrown wind
developers and other domestically headquartered wind blade
manufacturers who have brought hundreds of jobs to South Dakota
who have praised the Recovery Act’s extension of the production
tax credit and the new Treasury grant in lieu of the investment
tax credit included in the Recovery Act. I have heard
firsthand how these measures are allowing the survival of domestic
wind development in the United States, creating jobs and fostering
economic development in rural communities. So I thank you again, Mr. Chairman, for holding
this hearing and look forward to the testimony
of our witnesses today. [The Chairman] The gentleman from Missouri,
Mr. Cleaver, is recognized. [Mr. Cleaver] Thank you, Mr. Chairman. I think it is important for us to take a look
at the impact of the ARRA legislation. Mr. Chairman, I was in the room as a member
of the Financial Services Committee. I was sitting
there when President Bush’s Secretary of the Treasury,
Hank Paulsen, along with Ben Bernanke, along with Mr. Cox, our
former colleague, and Sheila Bair sat at a table not dramatically
unlike the table before us today; and from their lips
fell the most bone- chilling testimony I have ever heard since
being in government. They explained to us that if the Fed did not
act quickly that the U.S. economy would fall from the
precipice, taking with it the economy of the planet. President
Bush pushed hard to take action, and I don’t disagree. And
we took action. We then, after electing President Obama, began
to address this problem that was deepening even after trying
to put a tourniquet on the Wall Street entities that
could have also taken down other financial institutions around
the country. President Obama put forth a stimulus package.
Some, like Paul Krugman, the Economist journalist, believed
that it was too small, that you can’t have a $15 to $17
trillion economy and try to completely turn things around with
less than a trillion dollar stimulus. Nonetheless, we
approved it, and I supported it and supported it strongly. If you look at the job losses in the United
States over the last decade, you would be alarmed. Because
many of those jobs, even after this recession ends, will not return.
And I fear that the 3.5 unemployment, full employment
number, is going to have to be adjusted, that no longer can we
expect full employment to be when 3.5 percent of the American
public is unemployed. That is probably going to go up
after this recession is over. So the only thing remaining
for us to do is to create new jobs, and ARRA gave us the opportunity
to create new jobs. In Kansas City, Missouri, one of the cities
I represent in Missouri, we used the money to create what
is called the Green Impact Zone, 150 blocks of the most decrepit
piece of geography in urban America. One census track shows unemployment
at 70 percent. The Kansas City Star did a story
on this track and called it the Murder Factory. We have been able, since ARRA, to get a matching
grant from the Department of Energy to match a $24 million
grant from our power and light company to begin the construction
of a smart grid. Men and women are hired today, this
day, who live in the Green Impact Zone who will be a part of the
construction team for the smart grid. And we are weatherizing
3,000 homes, and the men and women doing the weatherization
are men and women who are unemployed, and, yes, some of them
were union members. The point is, as I close, Mr. Chairman, that
this is working and working well. Thank you, Mr. Chairman. [The Chairman] I thank the gentleman. The gentlelady from California, Ms. Speier. [Ms. Speier] Thank you, Mr. Chairman. I am glad that we are here today to discuss
clean energy jobs which are crucial not only for our economic
recovery but for our long-term economic growth. On Monday of this week, I organized a bus
tour to inspect the progress of recovery projects in my district.
From 300 construction jobs at San Francisco Airport,
job training for transportation workers, new buses fueled by
biofuel, aid to services for the unemployed, and a collaborative
partnership to secure $2 million in grants to re-house the
homeless, I can see the impact of timely and targeted recovery
funding working in my district. What was very interesting during the tour
was I visited a company that built super-efficient surge protectors
for our electric grid to shield consumers from blackouts.
The company received 8.5 million ARRA grant dollars to
fund an installation in southern California and has already expanded
its headquarters to a larger facility. One thing
they pointed out to me, though, was that there is no testing
facility in the United States. So they have to actually transport
this huge piece of equipment to Vancouver to test it,
another opportunity for us to start growing some of these opportunities
at home. Another company based in south San Francisco
received $21 million in recovery funding to build an advanced
biofuels refinery in Pennsylvania which will create
jobs in both locations and will help them scale up production
of a cutting- edge renewable biofuel which will help us
break our addiction to oil. Finally, my district is home to the Nation’s
leading solar power provider for homeowners on up to Federal
Government, and thanks to the Recovery Act policies for renewable
energy providers that has ended its hiring freeze
and plans to add 16 new solar installation crews in the coming
months. I know we have much to hear from our witnesses,
and I yield back. [The Chairman] The gentlelady’s time has expired. The Chair recognizes the gentleman from Washington
State, Mr. Inslee. [Mr. Inslee] I want to make a point about–maybe
someone has already said it–I just met a woman named
Elana Meyers, who was our Gold Medal winner in the bobsled competition
in Vancouver; and it was the first time I ever got to hold
a Gold Medal. It was pretty cool. But it made me think about
another competition we are in about who is going to get the Gold
Medal in the clean energy economy. And if it wasn’t for ARRA,
we would be giving a huge head start to China. ARRA allowed us
to get out of the chute, at least to begin getting into this
competition with the rest of the world to see who is going to be
preeminent in clean energy. And I just want to make two points about why
ARRA was successful in getting us into the race, two
companies I will mention. I met a fellow from Johnson Controls the other
day who said they are going to start building a lithium
ion battery manufacturing plant in Michigan, hopefully
construction this fall, which would not have happened but for
ARRA. And we would not have any meaningful manufacturing plant
in the United States but for ARRA in this regard. And in the R&D provision, we have a company
called Energy II. It is in Seattle. It has got a $20 million-plus
grant to fund ways to use nanotechnology to make ultra
capacitors 15 times more efficient and more dense. So ARRA has got us into the race. We are in
the race, and we wouldn’t have been for it, and I am glad
we are in the race. [The Chairman] And the gentleman’s time has
expired. Maybe what we could do is hear from Johnson
Controls. The gentleman from Washington State has, as you
know, given Johnson Controls a little bit of a plug here. So while
the gentleman is here–we apologize to the other witnesses
who have been told what the order will be–I thought maybe we
could start with you, Mary Ann Wright, Vice President of Johnson
Controls and Managing Director of the company’s Business
Accelerator Project for advanced energy storage solutions. Perhaps
you could expand upon what Mr. Inslee was just referring to. [Ms. Wright] Chairman Markey, Congressman
Sensenbrenner, and the rest of the members, thank you very much
for inviting us here to tell you what we are doing with our
Recovery matching grant; and I also appreciate that you did
it today because I have to head back to Milwaukee and greet all
of my new employees in Milwaukee that we are hiring
as a result of the work we are doing in the United States. I have three things that I want to talk about.
One is the state of the industry in general, number two
is what we are doing with our stimulus grant, and number
three is the challenges that we face. I think you have a packet of some pictures.
It is also in the written testimony, and I would like to
kind of talk you through this. Because if you look at this,
what should pop out at you is it is a pretty scary picture. If you take a look over in the right, a cell,
which is this–and there is about 100 to 200 of them
in these electric vehicles–50 to 75 percent of the value is
in the cell. All of these materials come from virtually the Pacific
Rim who has a stranglehold on the supply base. Over on the
left-hand side is the system, and that is where we put the cells
and integrate it and put it into the vehicle. And if you think about this for a minute,
if we don’t change this, we will change our oil cartel,
our OPEC oil cartel for an Asian battery cartel. And to scare
you a little bit more, our Pacific Rim friends aren’t standing
still. They continue to invest in manufacturing capability,
technology, and capacity. In 2008, Johnson Controls opened up the world’s
first lithium ion manufacturing facility for automobiles
in Nersac, France, in 2008. Out of that facility, we
supply on a mass production scale Daimler and BMW. For pre-production,
we support our customers Ford, Azure Dynamics,
Jaguar, Land Rover, and Volkswagen. In 2009, we were the recipient of a stimulus
grant. And the key thing that I would like you to take away–and
Congressman Inslee, you stole my thunder–and the fact
is, in the absence of this grant, we would not have expanded
our manufacturing in the United States. We were looking in Europe
and in Asia, but, because of this action, we are going to build
our first manufacturing facility in Holland, Michigan.
As a matter of fact, it is up. We are retrofitting it, and
we will begin production later this year for one of our
customers and begin full-scale cell production next year. We are
moving fast, we are moving decisively, and we are very encouraged
by the actions that the legislature has taken. I think also–and it may be something Congressman
Inslee doesn’t know–that by 2012 we will move and
transition all of our European production into this U.S. facility,
and I think that is a real feather in our cap versus what
is typically happening in our economy. When we were awarded our grants, our commitment
wasn’t just to put up a plant but that we would help stand
up an industry; and that involves everything from our raw
materials suppliers all the way to our end-of-life recycling infrastructure. Johnson Controls presently is the largest
provider of your starter batteries and the largest recycler
of these batteries as well, so we are going to build on those
capabilities of a long-standing, mature company and industry
to be able to transition that into lithium ion. But if you think about the materials for a
moment, as I said, most of those comes from the Pacific
Rim. One of our commitments is to develop a domestic supply
base. I am very happy to let you know that we have recruited
two Asian suppliers to the United States who will be
setting up business in Michigan and supplying the U.S. market.
We need to continue to develop a domestic supply base as well. We have great partners in Ford Motor Company,
Azure, Daimler, BMW. We have terrific long-standing
partnerships with Argonne National Laboratory in Oakridge to
continue our work on our technology. In Milwaukee, which is our headquarters for
this business, we have stood up a team called the accelerator
team, which I lead; and our job is to accelerate the demand
creation and the technology and innovation so that we can have
a sustainable business that does not rely on subsidies and
incentives, that can be profitable. So while we have customers, this is terrific.
We have some great partners. We have an issue. And one
of the graphs that I gave you was the demand. And if you take a
look out in the 2015 time frame, we believe there will be about
4 million units of global capacity versus 2 million units of
demand. In North America alone, there will be about 2 million
units of capacity and 800,000 units of demand. We have got to
find a way to fill that gap. Transition of government fleets is going to
be an important piece of that because, one, it allows us to
drive scale, which is a key part of our business equation and,
number two, we have over a million units in these fleets in the
GSA and Postal Service which are perfectly suited because–I
am running out of time. Respectfully, I want to leave you with one
key piece, however, is that we need to make sure we leverage
these recovery investments as we transition these
fleets and as we build our industry. Shouldn’t we give preference
to vehicles that are built with batteries and electric
drive components that come from investments that we made here
in the United States so that we don’t allow these vehicles
and this industry to transition from a Middle Eastern OPEC to
an Asian battery cartel? Thank you very much. [The Chairman] Thank you very much, and thank
you for telling us something Jay Inslee doesn’t know.
That is a first in this committee. Our next witness is Paul Gaynor, who is the
CEO of First Wind, an independent company focused on the
development, ownership, and operation of wind farms. Mr.
Gaynor has over 20 years of experience in the energy industry
and has been involved in the financing of these projects
around the world. We welcome you, sir. [Mr. Gaynor] Thank you, Chairman Markey, Ranking
Member Sensenbrenner, and members of the committee.
Thank you for inviting me to testify today. My name is Paul Gaynor. I am the CEO of First
Wind, a U.S.- owned, independent wind energy company based
in Massachusetts. We are focused on the development, financing,
construction, ownership, and operation of utility-scale
wind farms in the United States. We have been in business since
2002, and today we operate about 500 megawatts of clean, renewable
wind power through six operating projects in Maine, New
York, Utah, and Hawaii. Currently, we are wrapping up construction
on our seventh project, the Stetson II expansion
in Maine. All in all, these facilities represent an investment of
approximately $1.2 billion. First Wind currently employs over 200 professionals
in nine States in this new industry. In the communities
that we work, we also rely heavily on people in these communities
with local knowledge in order to properly site, build,
and operate wind farms. Our projects generate significant amounts
of employment and economic activity, which I will cover
in more detail shortly. I have been asked to address the impact of
the clean energy provisions of the Recovery Act on our company;
and the answer, in short, is the Recovery Act has been profoundly
important to our ability to continue to grow and to make
investments in renewable energy facilities. This has also
resulted in approximately 1,000 jobs in 2009, and we expect
a similar number in 2010. The convertible investment tax credit, or
ITC, has had the most impact with the collapse of the credit
markets in 2008. Sources of capital practically dried up overnight.
As a relevant example, we lost a $140 million firm
commitment from Lehman Brothers for a project that was under
construction in New York. Then Lehman filed for bankruptcy,
and the commitment was lost. At that point, all sources of capital
were frozen; and an analysis by the American Wind Energy
Association shows that in 2009 wind power development might
drop as much as 50 percent from the 2008 levels. Fortunately, Congress and the Obama administration
recognized the threat that this extraordinary economic turmoil
presented to our industry and responded with urgency and
effectiveness. Thanks in large part to the clean energy
provisions of the Recovery Act, the U.S. wind industry broke
all previous records by installing nearly 10,000 megawatts in
2009, as the chairman noted in his opening comments. The
Recovery Act provided the help we needed when we needed it. During 2009, First Wind completed construction
of wind facilities in Maine, New York, and Utah and
began construction on another project in Maine. In partnership
with our general contractors, RMT in Wisconsin, Mortenson Construction
in Minnesota, and Reed & Reed in Maine, we created
over 1,000 jobs during the construction of these facilities.
And without the convertible tax credit program, the construction
job creation and long-lasting economic impacts would not
have happened. Using the Stetson projects and the ongoing
expansion as an example, the combined facility represents
a $220 million investment, with over 130 local named businesses
providing goods and services during the development
and construction phases, about 550 construction jobs in both
phases. For another example, I draw your attention
to the pamphlet that I have handed out which outlines the
economic benefits of our 200 megawatt Milford wind project in Utah.
In this project, over 60 local businesses participated, creating
250 jobs on site and supporting an additional 200 jobs
in the region. Additionally, because of the Recovery Act,
we have been aggressive in forging ahead with our business
plans in 2010 and beyond. We plan to construct a second phase
in Utah plus additional projects in Maine, Vermont, New
York, and Hawaii, representing an additional 300 megawatts of
power capacity and an incremental $650 million of new investment
in this sector. The success of the program has importantly
sent a strong signal to the capital markets and mobilized
significant incremental capital. In our case, the Recovery
Act funding has spurred an additional $695 million of our
own equity and loans from banks. We expect a similar impact on
our 2010 plans. Wind power is a capital-intensive business;
and, thus, the opportunity to use Recovery Act funding to
leverage significant private investment has been extraordinarily
effective and important. Additionally, I want to let you know that
last week Secretary Chu announced that one of our projects
has received a conditional commitment from the DOE under
the Innovative Loan Guarantee Program. The Kahuku project in Hawaii
uses an innovative battery storage system to address
some of the wind integration issues facing the local utility. We encourage Congress to follow the leadership
of Chairman Markey and others on this committee who are
trying to foster a more stable and predictable investment and
regulatory climate for renewable energy. In particular, we hope
Congress will make it a priority to extend the convertible tax
credits this year. Access to capital has improved, but it remains
far short of pre-financial collapse conditions. Thank you for the opportunity to take part
in this hearing. I look forward to answering your questions. [The Chairman] Thank you, sir. Our next witness is Lisa Patt-McDaniel. She
is the Director of the Ohio Department of Development, and
she leads efforts to accelerate Ohio’s economic growth through
development of high- growth industries. She oversees Ohio’s Recovery
Act efficiency programs, including weatherization. Welcome. Ms. Patt-McDaniel. Thank you, Chairman Markey.
I want to thank you for the opportunity to speak with
you today on behalf of Governor Strickland and myself. The Ohio Department of Development is responsible
for distributing $512 million in stimulus funding
through a variety of programs ranging from homeless assistance
to renewable energy deployment. Ohio’s nationally recognized
home weatherization assistance program is administered
by our Department’s Community Development Division
and specifically our Office of Community Services. We are providing
assistance for citizens whose annual household income
is at or below 200 percent of the Federal poverty guidelines. The State’s weatherization budget from the
Federal stimulus is $266 million. More than 32,000 housing
units will be weatherized during the 3-year grant period
and more families will get the help they sorely need and local
businesses will see an increase in sales of materials, supplies,
and trucks to carry out the larger program. Ohio’s process for utilizing weatherization
resources effectively and expeditiously is one of the
reasons I have the honor of speaking to you today. Ohio was recently
recognized by the USDOE as leading the Nation in spending
Recovery Act dollars to weatherize homes, with Ohio completing
more than one in five of the projects reported nationally
last year. Since July, 2009, our State has weatherized
over 8,100 homes. Dwellings weatherized to date represent
103 percent of our planned production so far, meaning that
we have weatherized an additional 204 additional units than originally
planned. And, importantly, the additional support for
our weatherization program has required the creation of another
thousand jobs and retained 1,500 jobs as of December of 2009. We believe there are several reasons why our
State was able to ramp up and respond to the needs of our
citizens so quickly. Just to highlight, we have an excellent weatherization
network. We have a large list of eligible households
that we had before the Recovery Act was passed. We have an excellent
Ohio weatherization training center. It is run
by a corporation for Ohio, Appalachian Development; and we established
three training hubs so we can train people to work
in these jobs quickly. And, importantly, we instructed our
providers to go ahead and start weatherizing homes with these
funds as of July 1st, knowing that we would have to make up
our staff salaries and retroactively adjust them once the prevailing
wage rates were issued by the Department of Energy. By reducing household energy expenditures,
increasing energy efficiency, and increasing the safety
of homes owned or occupied by low-income Ohioans, we have a
foundation to make our State a cleaner, more efficient place
to live. There are several important programs that
complement our efforts to create jobs and promote energy
efficiency, and these are through the State energy program, which
received $96 million of Recovery assistance. We designed
programs through that set of money to stimulate the economy
through the retention and creation of jobs, saving energy,
increasing generation from renewable energy projects,
and reducing greenhouse gas emissions. I am going to briefly touch on the programs
that we designed with that $96 million, but the programs
were meant to support our aggressive renewable energy portfolio.
It is the third most aggressive portfolio in the Nation,
and we wanted to make sure that we created jobs with a focus
of the expenditure of these programs. We set up a Deploying Renewable Energy in
Ohio Initiative which is investing more than $42 million of
those funds through renewable deployment projects focusing on
strengthening Ohio’s manufacturing industry, transforming waste
to value by capitalizing on what would otherwise by considered
waste by- products from Ohio’s agricultural and food
production industries and turning it into a source of
renewable energy. We took $8 million and allocated it to making
efficiency work through grants to help fund greater energy
efficiency projects. Our targeting industry efficiency
program provides for $15 million in grants to manufacturing
companies seeking to improve the sustainability of Ohio’s industry.
The banking on new energy financing, which we also call the
Ohio Energy Gateway Fund, is a private-public partnership
which will expand access to capital to grow and sustain the
fuel cell, solar, wind, and energy storage industries in Ohio;
and, finally, setting the stage for Ohio’s Carbon Management
Strategy Initiative, which is allocating $500,000 to
organize an integrated collaborative planning process
to address energy policy. The announcement of the targeted industry
efficiency portion of the State energy program will create
an estimated 217 jobs across the States. In conclusion, I would just like to say that
we are building on the foundation with the Recovery
Act funds, and they have been very important to us in promoting
Ohio’s economy. I thank the Chairman and the ranking member
and the committee members for having me speak today. [The Chairman] Thank you. Our next witness is Brian Ashley. He is the
chief Marketing Officer of the solar company Suniva and has
most recently led Suniva’s emergence into the Indian and European
solar photovoltaic markets. [Mr. Ashley] Thank you very much. I am very
proud and honored to be here before the committee today. Suniva is a great American jobs and export
success story. We manufacture some of the world’s most efficient
and highest power silicon solar cells and modules, and
we use low-cost and manufacturing techniques to do so. Therefore,
we can beat the Chinese at their own game. In fact, this is what we make in Norcross,
Georgia. It is about 4.3 watts when the sun shines on it;
and, Mr. Chairman, I will be happy to give this to you. You can
tape it on the module that you have in your office and modernize
it a little bit. Suniva was spun out of the Department of Energy
funded University Center for Excellence in Photovoltaics
at Georgia Tech University with a deep patent portfolio
of American patents and technology and access to one of
the best solar labs in the world for our research and development.
It is a great example of governmental-funded research helping
create U.S. industry leadership and 150 new jobs since
2007 when we were founded. Very good, well-paying jobs, I might
add. We currently have a hundred megawatts of capacity
in our plant in Atlanta, and we do produce the highest
efficiency at low cost solar cells in the world. We produce
18 percent efficiency cells today. Most of our competitors
are at about 16.8 percent. And that efficiency, of course,
represents the amount of sunlight actually converted to electricity. We expanded in 2009. We added 80 new direct
jobs, provided over 200 indirect jobs, and spent $19 million
on new equipment for our lines. We received 48C credits of
$5.7 million for that investment, and we thank you very much. This
was very important to the expansion and being able to add these
jobs sooner than we would have been able to. Domestic demand has also been stimulated for
solar thanks to the Treasury’s 1603 provisions which gave
us the additional confidence to move up the expansion dates
earlier than planned, as well as for our plant, too, which I will
mention in a minute. And the demand there is turning into
real business here in the United States. We currently employ
many former auto workers and managers from shuttered GM and
Ford plants in the Atlanta metro area; and 24 percent of our
workforce are veterans, mostly from the Iraq war. We exported 90 percent of our 2009 production.
We are beating the Chinese. I exported to India,
China, South Africa, even to Taiwan. The first grid-connected solar farm in India
in the state of West Bengal is powered by Suniva cells
manufactured by workers in Norcross, Georgia, instead of Shanghai. Currently, the second largest solar farm in
India in Karnataka state, which Prime Minister Singh
will dedicate this month himself, is also powered by American
technology made in Norcross, Georgia. The roof of the new sports stadium in New
Delhi, which will be home to the commonwealth games, has 1.1
megawatts of Suniva cells. We have power fields in Germany, Italy, and
France powered by Suniva; and the list is growing. We plan to export at least 85 percent of our
production this year, which is greatly expanded from
last year–if we can expand quick enough. Our problem is we are sold out. We have had
to turn away new export customers since last December,
unfortunately, including another Chinese company that wants
to buy my products. We have had to impose limits on
the allocations to our current customers. I was in India three weeks ago on a U.S. Commerce
Department Trade mission and had to turn business away. I am
sad to say that Chinese and Taiwanese workers will benefit from
that and get that business rather than more U.S. workers. The Chinese and Taiwanese are very, very serious
about owning the solar PV value chain which we in
this country have neglected far too long; And they will own
it like they own many other manufacturing industries if we don’t
continue to do what you started to do in the last year to help
support us. There are many high, very large, well-funded
Asian businesses that are trying very hard to do
what we do. Right now, we are the only ones who do what we do
with our technology, but they will catch up with us.
They will figure it out. And we have got to stay ahead of them.
But we have also got to spend money on expanding and creating
new jobs to meet that customer demand. It is a big tradeoff,
and right now it is hard to borrow money still. It is damn hard
to borrow money still, I am sorry to say. We are currently building out a 30,000 square
foot physical extension to our facility in Atlanta right
now, adding a new 70-megawatt line. That is 50 new direct jobs
we are hiring right now and 200 indirect jobs in construction.
An extension of extra funding in 48(c) like the President
has asked for will help us a lot, especially if it is refundable
quickly so we can turn it into cash. We would immediately apply
if that were to happen. Reasonable financing is very hard
to get. We are planning our second plant, a 400 megawatt
initial capacity plant in Saginaw, Michigan, 500 direct
jobs, 21,000 indirect jobs according to Michigan Economic
Development. It will go to a gigawatt eventually. We are awaiting
word right now from the DOE on a loan guarantee so we
can break ground and start this. Again, if 48C were expanded and
refundable, like 1603, we would put in an application ASAP
for that equipment. Other areas where you could help create more
clean tech jobs are in RPS and certainly in national
feed and tariff would be extremely helpful. We are competing against the Chinese. We need
U.S.-based solar industries as a matter of national security,
I believe. I invite all of you to come to Atlanta, see
our facility and see the jobs. See the former auto workers and
the veterans working there. It is real. Thank you. [The Chairman] Our final witness today is
Mr. Brian M. Johnson. He is the Federal Affairs Manager
for Americans for Tax Reform and is the Executive Director of
the Alliance for Worker Freedom. Welcome, sir. Whenever you are ready, please
begin. [Mr. Johnson] Good morning, Chairman Markey,
Ranking Member Sensenbrenner. I appreciate the opportunity
to appear before you today to discuss the effects of the Recovery
Act on our economy with respect to green job creation. Government spending of this magnitude cannot
stimulate our economy. Every dollar spent attempting to
force the market toward a specific sector is subject to taxation
and must be first borrowed out of our economy. The result
is a redistribution of existing purchasing power,
rather than the creation of new purchasing power. This spending
creates less economic activity than if the money had been
left with private- sector investors. The goal was to create 3.6 million jobs, according
to the administration’s own estimates. Since signed
into law, we have lost 3.3 million jobs. According to Recovery.gov,
there were 440 non-existing congressional districts that
saved or created false jobs to the tune of $225,000 per job.
Any potential impact the recovery package brought to the
economy was virtually negated by the application of a
1931 market- distorting wage law known as the Davis-Bacon
Act. Investigators from the Office of Inspector General found
that, quote, one or more errors existed in 100 percent of the
wage reports they reviewed. The Davis-Bacon Act inflates wages on average
by 22 percent nationwide and construction costs by almost
10 percent. Application of this wage law added $17 billion
to the Recovery Act and is impeding efficient implementation
of the weatherization program nationwide. Mismanagement
of the Recovery Act not only encompasses wasting
money in the United States, but much of the money spent actually
creates jobs overseas. Eighty percent of the first
$1 billion spent on grants to wind energy companies went to
foreign firms. In the second round of government grants, 79
percent of the $2.1 billion went to wind energy companies based
overseas. The renewable energy policy project estimates
that for 1 megawatt of wind energy that is developed,
4.3 jobs are created. The 1,219 turbines built by foreign-owned
manufacturers have potential capacity of 2,280 megawatts. Using
their estimate, the installation of these turbines may have
created as many as 6,838 manufacturing jobs overseas. Domestically, the market-altering subsidization
has the same economic effects. The Mohave Desert solar
power project received $1.4 billion from the Recovery Act.
Construction of that facility required a thousand workers
but only 86 permanent employees to run the plant. That is $16 million
in taxpayer subsidies per permanent job. In Florida, the DeSoto solar center was to
be the, quote, largest solar power plant in the U.S., according
to President Obama. The center received $150 million from
the Recovery Act. After using 400 construction workers to build
the site, the solar center now only employs two people. The single largest wind grant under the program
reported by the Department of Energy on December 29th
was $178 million for the Texas gulf wind farm in Sarita, Texas.
All 118 turbines erected on the farm were built by Mitsubishi,
a Japanese firm that does not build wind components in the
United States. Perhaps the most evident use of mismanagement
and inherent inefficiencies lie in the failed weatherization
program. While some States have experienced success, national
results have been dismal. The Recovery Act provided $5
billion to weatherize 593,000 homes. ABC News reports that less
than 10,000 homes have been weatherized nationwide, while the
Department of Energy claims 22,000 homes have been impacted,
which is still less than 4 percent of the targeted goal. So far, the Inspector General found the jobs
impact has, quote, not materialized and the application
of the costly Davis-Bacon requirement costs $57,000 per
home weatherized nationwide on a national average. A State-by-State look exposes the localized
impact of this flawed national program. New York has $394
million available to weatherize 45,400 units but only did 280.
Alaska, Rhode Island, Wyoming, and Washington, D.C., were given
over $50 million combined to weatherize homes. To date, zero
homes have been impacted. The biggest expenditure in the stimulus weatherization
program is $270 million. Not one penny of that went to actual
home weatherization but was given to the Department of Energy
to administer grants. The Recovery Act was supposed to be timely,
effective, and show immediate results. The realization is
that using the invisible hand of the government to artificially
tilt the economy will never be sustainable. Responsible
solutions should remove barriers for private investment and
should incorporate an all-of-the-above energy approach using
a diverse blend of sources without raising taxes or increasing
the regulatory burden. Thank you again for the opportunity to speak
today, and I look forward to answering any questions. [The Chairman] Thank you, sir. You spoke so
fast you left yourself 30 seconds over. The Chair recognizes the gentleman from Missouri,
Mr. Cleaver. [Mr. Cleaver] Thank you, Mr. Chairman. I thank all of you for your testimony. I am a little concerned. We just had economic
output rise at the slowest level this past decade since
any decade since 1930, which means we have a serious challenge.
And I am curious, Mr. Johnson, if you are criticizing
government subsidies in the development of energy technology–and
then make sure that you are–is that correct? [Mr. Johnson] Yes. [Mr. Cleaver] Do you ever find it necessary
to criticize government subsidy of the oil industry? [Mr. Johnson] The term “subsidy” has been
thrown around a lot. One of the things a lot of industries
benefit from are tax cuts. For example, section 199 is the domestic
manufacturer’s tax deduction that all companies who manufacture
domestically in the United States get. [Mr. Cleaver] We only have 5 minutes. Are
you equally upset that we have subsidized the oil industry approximately
$150 billion at least from 1968 to the year 2000,
150 billion, we don’t have decades of subsidization so that
I am sure, does that bother you? [Mr. Johnson] Yes. I think targeted spending
toward any industry is flawed. [Mr. Cleaver] So let me suggest what should
we do when we have an economic downturn, should we say we
are not helping create any new jobs, we are going to sit around
and remain happy and allow the rest of the world to overtake
us? What would you have done had you been sitting in
the room with the people I named earlier? [Mr. Johnson] Sure. You can create jobs without
targeted spending. One of the ways which I mentioned
was tax cuts. You can freeze spending and rescind unspent stimulus
funds. You can reform regulations to reduce unnecessary business
costs. And if you are intent on spending, you can make sure
it is done efficiently and effectively by suspending
all Davis-Bacon Act requirements. [Mr. Cleaver] Are you aware that 30 percent
of ARRA were tax cuts? [Mr. Johnson] Thirty percent, yes. [Mr. Cleaver] You were aware of that? [Mr. Johnson] Yes. [Mr. Cleaver] So you don’t support that? [Mr. Johnson] I support the tax cut component.
The majority of the plan was spending, $836 billion. [Mr. Cleaver] So we should have done a stimulus
package that wasn’t, in fact, a tax cut package? [Mr. Johnson] Think we should have done the
tax cuts without the targeted spending. [Mr. Cleaver] So we should have had a stimulus
package without a tax cut? [Mr. Johnson] I am not supportive of a stimulus
package at all. [Mr. Cleaver] Including the tax cuts? [Mr. Johnson] The tax cuts as part of the
package–the tax cuts I support. Tax cuts in general I support.
The stimulus in terms of targeted massive government spending
programs– [Mr. Cleaver] But the tax cuts were supposed
to stimulate the economy. [Mr. Johnson] The tax cuts are not spending.
The part of– most of the stimulus package was direct spending
which came into the market in favor of targeted certain
industries. [Mr. Cleaver] So you don’t support tax cuts? [Mr. Johnson] I support tax cuts. I oppose
targeted spending. They are two separate components. [Mr. Cleaver] I understand clearly what they
are. But I am saying you said you support tax cuts, but
you don’t support any stimulus. I am telling you the tax cuts were
a part of the stimulus and you are saying, so I just want
to know what you support. [Mr. Johnson] I support tax cuts and not massive
government spending. [Mr. Cleaver] So after we put the tax cuts
in, that should have been the bill we approved? [Mr. Johnson] The bill should have been a
broad based massive tax cut bill with no government spending. [Mr. Cleaver] Okay. And so what about the
fact that the rest of the world is taking off in terms of their
technology in energy and what about the people who lost
jobs, 8.4 million, 8.4 million just since the recession started? [Mr. Johnson] We are continuing to lose jobs.
The stimulus package has not done anything near to what
the economists predicted and what the administration said.
The international experience hasn’t been always positive. Spain,
Germany, and Denmark have experienced extreme job losses
in direct relation to targeted government subsidies with respect
toward the Green JOBS Act. Only one in 10 of the jobs created
through green investment is permanent in Spain. Germany
is experiencing the same thing. [Mr. Cleaver] Now you do recognize that Spain
is a whole ‘nother industry that relates to deficits
and debt and the Euro. Let’s talk about another country. Let’s
not do Spain. Spain is having some problems like Greece,
but I just want to deal with, I am trying to get, if you had
been sitting in this seat, what you said let’s just forget everybody,
forget everything, let’s just have some more tax
cuts, that by the way were passed without any kind of means of making
up for the tax loss. Would that have been your policy? [Mr. Johnson] If I was sitting in that chair
right now there were several things I would have done. Passing
a massive spending bill is not one of them. Repealing
the Davis-Bacon Act, enacting other reforms, making government
more transparent, extending drilling areas. There
are ways to reduce our energy independence and extend security. [Mr. Cleaver] Okay, my last statement because
my time is running out. Economists say that had wages
kept up with the rising cost of living, that minimum wage today
would be $20.65 an hour. So I am coming out of public housing,
I am concerned about everyday human beings who are losing
their jobs and suffering and now have the opportunity to
get a job doing weatherization. And they are doing it in my
district, so it is not like a phantom job. Thank you, Mr. Chairman. [The Chairman] The gentleman’s time has expired.
The Chair recognizes the gentlelady from West Virginia,
Mrs. Capito. [Mrs. Capito] Thank you, Mr. Chairman. I thank
the witnesses here today. Just for bit of a background,
I represent the State of West Virginia, which we know is a very
energy rich State in natural resources. Since the stimulus bill
was passed our unemployment has gone from, in January of
2009, 6.7 to up over 10.5 percent and it is steadily climbing,
a source of great concern for us in our State. I am interested on a couple of issues. First
of all, the statement by Mr. Johnson that and, Mr. Gaynor,
you may be able to help with this, that 80 percent of the
dollars that went for wind production were for foreign companies
that are manufacturing overseas. I noticed in your
statement you said you buy your components from domestic manufacturing.
Can you help me with that? [Mr. Gaynor] We have historically, since we
have been building our business we have historically
bought turbines from General Electric and Clipper Wind Power, which
are both domestic suppliers. [Mrs. Capito] But the statement about, would
you say generally speaking that most of the wind production
jobs are in terms of making the actual turbines and stuff
overseas, is that correct? [Mr. Gaynor] AWEA has actually released some
data that shows for all of the 1603 dollars, those projects
I think were a total of 53 percent of the components, were
actually sourced domestically. [Mrs. Capito] So that 47 percent went overseas. [The Chairman] Thirty-seven. [Mr. Gaynor] The trend of where it was back
in 2005 I think the number was 25 percent, and just anecdotally
new wind power companies, Clipper is a good example, it is
home grown here in the U.S., they have added manufacturing facility.
Vestas, which is a large Danish manufacturer, has also made
a very large manufacturing commitment in Colorado. So although
the number, I think 53 percent is–it is true that means
47 percent is coming from overseas–I think the trend is certainly
favorable. My view is one of the things that is making
that happen is the Recovery Act. [Mrs. Capito] I think that certainly in my
State we are being told that we need to wean ourselves
from fossil energy fuel production, and I wanted to ask from
Mr. Ashley to in Norcross, Georgia, what is the energy, how
do you generate your power in your manufacturing facility? How
is it generated? [Mr. Ashley] We buy our power from a local
utility. [Mrs. Capito] And how do they generate their
power? Is it natural gas, coal, nuclear? [Mr. Ashley] I believe it is a combination
of coal, gas and nuclear. It is Georgia Power, which is owned
by the Southern Company. [Mrs. Capito] Disturbing in your testimony
in my viewpoint is that you have opportunity for business
expansion that you said you just saw 3 weeks ago in India, and
you were unable to take advantage of that. If we are being told
that we need to replace our fossil fuel jobs with green jobs
and you can’t expand your business and we are buying components
from all around the world and not in the United States,
how can we reasonably think that the replacement of coal
miners and others is going to take place here in this country
when obviously we are not competing well internationally. This
is the question I have, that if we are going to have the green
jobs in our country and our States that are going to be
penalized under a cap-and-trade proposal, how are we going to
attract these jobs into our States. [Mr. Ashley] Well, I can’t comment. I don’t
propose taking jobs away from coal miners at all. We need
renewable energy because we need a combination of all energy
sources to meet the world’s needs, and that is here in the United
States. [Mrs. Capito] I couldn’t agree more. [Mr. Ashley] A 3-megawatt project that we
are doing in India right now is bringing irrigation to people
for the first time ever because of the locational flexibility
of solar. It is not just about the U.S. [The U]S. could do a heck of a lot more, especially
in Georgia, but a lot of people have fought it
so long. Look, we need power especially, peak shaving power,
Congresslady. It is not taking jobs away from somebody. It is
not a zero sum game, I don’t believe. [Mr. Gaynor] I would certainly add to that
and echo the same sentiment. Where we are building wind farms
we are not taking away jobs from people that operate nuclear
plants or natural gas plants, hydro plants, solar plants. These
are new jobs that are being created. And also from a wind perspective, wind is
not the only solution, renewables are not the only solution.
Nuclear, coal, clean coal especially, is all part of the
solution. So I don’t see them as replacing. It is not a zero sum
game. It is additive. That has been our experience. [Mrs. Capito] I agree. I do think this is
where I think we are in agreement here. I would like to say
even though I did not vote for the stimulus package, I in my
district do have a very expansive clean coal carbon sequestration
experimentation going on right now at the A P plant, the Mountaineer
plant on the Ohio River, right across the river from
you. So I am very hopeful this will result in the technology
and in the investment that will give us that all-of-the-above
energy plan so that we can expand our solar, expand our
wind but still keep our baseload energy going. So thank you very much. [The Chairman] Gentlelady’s time has expired.
The Chair recognizes the gentlelady from California,
Ms. Speier. [Ms. Speier] Thank you, Mr. Chairman. Mr. Johnson, in your exchange with Mr. Cleaver,
you spoke about the tax credits or I should say the
tax cuts that you supported, and I think it is really important
when you speak up on this issue that you be knowledgeable. The
actual ARRA funding, the largest amount of money in ARRA
is for tax cuts. It is $288 billion in tax cuts. The next largest
amount is $275 billion which is, in fact, the money that
is being distributed to try and create jobs. And then the third
area is $224 billion, which is unemployment benefits. Now do you not support extending unemployment
benefits and COBRA benefits for people who are out of work? [Mr. Johnson] No, I do not. [Ms. Speier] So two-thirds of the recovery
bill you support. [Mr. Johnson] I support tax cuts when they
are a stand-alone tax cut. If they are coupled with other measures
the economic offset is far too great. The spending component
of this bill completely skews the economy. These jobs would
not be created. They are saying they are not taking jobs away
from other people and, with all due respect, you need this money
to create these jobs or the private sector would not create
them on their own, which means they are not there yet. [Ms. Speier] Thank you, Mr. Johnson. I would
like to give an opportunity to all of the other participants
on the panel to respond to Mr. Johnson’s criticisms and of
your specific programs, if you would. Mr. Ashley. [Mr. Ashley] Yes, just last week we were voted
by the Wall Street Journal, we were named Number 2 VC-backed
company in renewable energy and this week we were ranked
Number 15 in the Wall Street Journal’s top 50. There are people
wanting to give us money in the private sector as well, but
we need help from the government right now to expand faster
and quicker just because debt is in such terrible shape in
this country. Solar is getting, because of efficiency work that
companies like us are doing much, much, much, more competitive
in the market. And the people that are the antagonists of solar
constantly use old pricing. They misuse the technology. When
they are making comparisons of thin films in solars they use
one technology to represent all of solar in a particular situation.
It has changed a lot, and it is very viable. It is
getting more viable. But if we are serious about not letting the
Chinese, the Taiwanese, and others own this industry, we
need to do more here, just like they are doing. They think
it is important. They are investing a heck of a lot of money.
The rest of the world thinks it is important. We should, too.
That is my point. [Ms. Speier] A follow-up question, Mr. Ashley.
When the Section 1603 program expires, are you going
to be able to continue to finance and construct in your
industry? [Mr. Ashley] I believe so because of our worldwide
demand, yes. I wish 1603 would continue to be expanded
just to expand domestic demand for solar because it is good
for the industry, et cetera, at this point in time. But the
key right now is the financial situation that banks are in in lending,
borrowing money, you can’t get money. Even with a very
positive scenario, the interest rates they want to charge you
and the terms are very onerous and it is still very difficult. [Ms. Speier] Thank you. Ms. Wright. [Ms. Wright] Well, I think quite simply if
you take a look at where we believe the transportation industry
is going to go in an uncertain time frame, whether it is
over the next 5 years or 50 years, there is an awful lot of risk
and technological uncertainty around how we will transport ourselves
around, and the fact is the United States does not have
the infrastructure to be prepared to make that transition. Over
the past several decades we have allowed our manufacturing
base to erode, become a service economy. And frankly, while we are
technology leaders we allow the countries around the world to
implement it and commercialize it, and so from our perspective,
one, we would not have been coming to the United States
to do this. Two, we need to continue to expand our R&D and technological
capabilities so that we cannot only catch up but start to lead.
And that is risky. And private sector is not going to bear that
cost all by itself. We are going to need strong collaboration
with the government, and that is going to be skin in the game
for private sector, skin in the game for the government as
well. So from our perspective we are a for profit
company and we are for allowing market forces to take their
course, but there are unnatural events and disruptive events
taking place that are going to change how we get ourselves around
and we have to do it as a partnership. [Ms. Speier] Ms. Patt-McDaniel, there were
a lot of statistics that Mr. Johnson was spewing out
that would suggest that weatherization is not working. Ms. Patt-McDaniel. Well, same as we weatherized
over 8,100 homes, and I would be the last person who
has personally walked into those homes and seen the families who
have benefited that this was not a worthwhile program. As far
as Davis-Bacon, only 30 percent of our agencies had to adjust their
payroll, which meant that those jobs were well paying in
the first place. So Davis-Bacon certainly hasn’t hampered the
program. The adjustments were not significant. And I think that I would be the last person
also to say to the 1,000 men and women who were trained and
are now working with a trade to weatherize homes shouldn’t
have had those programs and that we shouldn’t have had the
recovery money and that they shouldn’t have had the opportunity
to provide for their families. [Ms. Speier] Thank you, Mr. Chairman. I see
my time has expired. Mr. Gaynor may or may not have a
comment. [The Chairman] We have time. Go ahead. [Mr. Gaynor] Thank you. From our perspective,
if we take a long view on the policy of getting this country
towards independent, more energy independent, then
what the Recovery Act did in the short term is send a signal
to the capital markets that the government is going to put
some skin in the game, and that is certainly what happened.
And I would argue that it was a crucial bridge that the government
provided in the 1603. And from a long-term policy perspective,
I think if you–again if we want to hit the energy independence
targets and renewable energy targets you are going
to need a policy that is sustainable and sends a signal to
the capital markets, where most, if not all, of the money is going
to come from over the long term, that the policies are there
both at the Federal level and the State level. So that is certainly
where we see the long-term play on the policy. [The Chairman] Thank you. Gentlelady’s time
is expired. So, we had a great year in 2009. People were
predicting that wind was going to just go right off a
cliff, that we were going to drop from 8,400 new megawatts of
electrical generation from wind in 2008 and because we were deep
in a recession, because the economic climate was not good,
that perhaps we could go down to only 4,000 megawatts of new
winds that was generated in the United States. But then,
because of the stimulus bill, we wound up producing 10,000
new megawatts of wind in the United States. And what a great
story that is because just for people who aren’t really
familiar with this, that a nuclear power plant, 1,000 megawatt
nuclear power plant, you think of a nuclear power plant that you
might have heard of, Seabrook, Diablo Canyon, you name it,
that is about 1,000 megawatts, a nuclear power plant. Ten thousand
new megawatts of wind installed in the United States in 2009
alone. It went up when everybody predicted it was going to be
cut in half. And so that is a tremendous story because obviously
that wind is in the United States of America. Those facilities
will be going for a long, long time. And as we move to electrifying
our automotive fleet, the electricity that we
are putting into the vehicles will be generated here in the United
States. We won’t be importing oil from OPEC. We can tell OPEC
we don’t need their oil anymore than we need their sand
because we are going to start generating the electricity for the
all-electric vehicles, for the hybrid electric vehicles
here in the United States. So that is a tremendous story. So let me go back over to you, Mr. Johnson,
of the $787 billion in the recovery package, $288 billion
of the $787 billion were tax cuts. So did you support
the $288 billion worth of tax cuts? [Mr. Johnson] I support tax cuts on their
own, not when they are coupled with a massive government spending—- [The Chairman] But if we just made it a $288
billion tax break program you would support that? [Mr. Johnson] Yes. Just the tax cuts. [The Chairman] So your problem was when we
started giving out, extending unemployment benefits? [Mr. Johnson] I am opposed to unemployment
insurance and massive government spending programs that
tilt the market in favor of one sector over another. [The Chairman] You didn’t like the unemployment
benefit extension in the bill. [Mr. Johnson] I am opposed to the unemployment
benefit extension, yes. [The Chairman] And I think that is important.
It is an honest position to have that you oppose unemployment
benefits extension. We are going to try to strap Congressman
Cleaver in over here, okay, as he is listening to this.
And also the same thing is true for extension of health care
benefits to people who have lost their health care benefits,
you also don’t believe that that is a good expenditure of
Federal money as well, is that correct? [Mr. Johnson] Yes, sir. [The Chairman] Okay. [Mr. Johnson] I do agree with that. [The Chairman] That is a fair—- [Mr. Johnson] Unemployment insurance extension
has been shown by several think tanks and organizations
to prolong the unemployment process by making individuals
more dependent on the Federal Government. And if I can address
the statistics I was spewing on weatherization—- [The Chairman] Spewing? Mr. Johnson [continuing]. From the Office
of Inspector General, a government agency, and they have
a table right here and actually in California only .03 percent
of units have been weatherized out of 43,400 that have been planned. [The Chairman] I get it. But let me get back
to you, Ms. Patt-McDaniel, how many new jobs did you create
in Ohio in 2009 from the weatherization project? Ms. Patt-McDaniel. One thousand. And that
is as of 2009. We are still counting. [The Chairman] That is great. So that is a
lot of jobs, a lot of people who would not have been able
to work. So let’s move over to you, Mr. Ashley. That
is a great story that the wind industry has, 10,000 new
megawatts. And what is the projection for 2010, Mr. Gaynor,
in the wind industry? Then we will come to you, Mr. Ashley. [Mr. Gaynor] Certainly at least 10,000 new
megawatts. [The Chairman] At least 10,000 new megawatts? [Mr. Gaynor] Certainly, from our perspective,
we are building slightly less than we put online
in 2009 but just ever so slightly, but the industry consensus is
at least 10,000. [The Chairman] So if we did 10,000 megawatts
of wind every year between now and 2020, that would be 110,000
new megawatts of wind on top of the 35,000 megawatts that
the United States already has, the 10,000 in 2009, the 8,400
in 2008 and then much smaller numbers in the preceding years,
but that would wind up at 145,000 new megawatts of wind installed
in the United States by the year 2020 and the entire
nuclear industry after decades of subsidies from the Federal
taxpayers only has 100,000, has a total of 100,000 megawatts
which is about 18 percent of all electrical generating capacity. Is that a realistic goal for the wind industry. [Mr. Gaynor] I certainly think that wind technology
is improving. One of the things that everybody
is concerned about is what is the price, what is the price of
delivered wind? And I think with, when you, if you want to scale
up to that level, doing 10,000 megawatts a year, increasing
domestic manufacturing, you have to assume that with
all of that additional capacity that will be built in
the U.S. that the price per unit will come down, making wind
a lot more competitive. So if that is certainly true,
then you could see that the growth could sustain itself. [The Chairman] Let me go back to the point
that I heard you make in your testimony, which was that 4 years
ago only 25 percent of the components of a wind turbine
were made in the United States, and in 2009, after the stimulus
bill, the recovery package passed, it zoomed up to over
50 percent of the component parts of a wind turbine were made
in the United States, is that correct? [Mr. Gaynor] That is correct. [The Chairman] That is a huge turnaround. [Mr. Gaynor] Those are the statistics from
AWEA based on all the 1603 projects, and again we would expect
that to continue as if you are going to keep adding megawatts,
wind turbines are big, they are difficult to transport so having
them made locally makes a lot more sense. [The Chairman] That sounds great. So you are
saying during the Bush administration 25 percent of wind
turbine component parts were made in the United States. During
the Obama administration the percentage doubled to over
50 percent. So that is a huge shift from the Bush administration,
which was clearly allowing for these component parts
to be built overseas, that we had to import them from
other countries. And clearly the Bush administration was just turning
a blind eye to this incredible drain of revenue. But under
the Obama position, we now see a dramatic increase in domestic
production. We see a capacity being built here in our country and
a turnaround from this Bush administration era perspective that
had us importing oil from OPEC. In fact, President Bush was over there asking
the Saudis to please produce a couple more million barrels
of oil a day in April of 2008, even as the wind turbines that
we were installing in our country were being imported
from other countries as well. What a disastrous policy
for our country. So now with this installation of new renewable
energy resources in our country we see more domestic
production, we actually see the jobs being created here in
our country, and we are seeing a reduction actually in the importation
of oil in our country. All of it great, especially with
these new battery technologies that Ms. Wright and Johnson Control
are beginning to manufacture here in our country which will
make it possible for us to have these all-electric vehicles. Mr. Gaynor. [Mr. Gaynor] I agree with the statements.
One other point to make is that, again, in order to hit these
saturation levels in wind, battery technology is going to be a
piece of that technical pie as well. And as I mentioned
in my comments, we were awarded a conditional commitment from
the DOE for one of our projects in Hawaii that we are building
this year. It is a wind farm on the north shore of Oahu coupled
with a battery energy storage system that is actually made
by a domestic manufacturer called eStream Power. [The Chairman] By the way, in the Waxman-Markey
bill, just for the record, we actually included $60 to
$100 billion for carbon capture and sequestration technology
for the coal industry. But of course Peabody Coal is leading
the opposition to that bill. Peabody Coal. So it is not like
we are not trying to help the coal industry. We are. But Peabody
Coal doesn’t want any part of our comprehensive bill to
deal with the issue and so as a result we are not going to stop
helping the industries that want to move forward. But
we are not going to allow them, at the same time, the Peabody
Coals of the world to say, don’t make any progress at all on any
front. We can’t block–because we can’t make progress on all
fronts doesn’t mean that we can’t make progress on any front. So let me come back to you, Mr. Ashley. Could
you give us a little update on the solar industry, how many
new megawatts were installed in the United States in 2009? [Mr. Ashley] Mr. Chairman, I have seen several
figures. Between 450 and 480 megawatts. [The Chairman] Do you know how many were installed
in the United States in 2008? [Mr. Ashley] Much less than that. I believe
less than 300 megawatts. [The Chairman] So nearly a doubling of solar—- [Mr. Ashley] Substantial increase. [The Chairman] Of solar installation in the
United States, so almost as you are saying, it is like half
of the nuclear power plant was installed in solar in the
United States in 2009. [Mr. Ashley] Yes, sir, in our industry association
the latest numbers look like probably around 10,000
direct, indirect and induced jobs in solar in 2009,
thanks to the 1603 provisions, and 60 percent are—- [The Chairman] Now when you say 1603 no one
knows what you are talking about. They are trying to think
of something famous that happened in history and they don’t remember
getting the right answer in the 6th grade, so people have
no idea what you are talking about. What is 1603? What would
be a good, give us another title for 1603 so that people would
understand? Explain to your mother why this is so important. How
would you explain it to her? [Mr. Ashley] It is taking a tax credit, which
is a very good idea, and making it better because—- [The Chairman] What would you call the program?
Don’t use the word tax credit. [Mr. Ashley] Solar incentive. [The Chairman] Solar incentive program, yeah,
and so with a solar incentive program we were able to double
the amount of solar in 1 year, produced here in the United
States, creating upwards of 10,000 jobs? [Mr. Ashley] Yes, sir, that is correct. And
I think going forward it will also be important to develop
the domestic industry because even some of the foreign,
my competitors that are foreign, will come here and build plants
if the industry is big enough. I don’t like that, but it is good
healthy competition. Because I tell you Malaysia and
China will give me a lot of money and a lot of grants to come
build a plant like the one in Saginaw, Michigan. [The Chairman] So what percent of solar new
jobs were created here in the United States as part
of the Obama stimulus plan? Do you know? [Mr. Ashley] I believe the job numbers that
I just mentioned. [The Chairman] So a very high percentage of
all the new jobs that were created in the solar area were here
in the United States? [Mr. Ashley] Yes. And to be fair, going back
to the initial stimulus bill in December of 2008 when the
tax credit was extended for 3 years or several years, et
cetera, from that point forward and then when the Obama administration
came in it really gave the industry a shot in the arm
and the confidence to expand. [The Chairman] So what I am hearing is that
there is a massive reindustrialization of the United
States going on, that we have moved under the Bush era with only
25 percent of wind jobs here in the United States, and we import
75 percent, to now it is over 50 percent of the wind jobs
are here in the United States, and the percentage keeps going
up, as almost each month goes by. I think the ultimate goal
is that 70 percent of all of the wind jobs will be here
in the United States by the time the Obama stimulus package
is completed, and that is a big good news story because people
are wondering where are the jobs for the next generation
going to come from? What is the next new industry in our country? So what we are hearing from Mr. Ashley and
Mr. Gaynor and Ms. Wright are huge good news stories in terms
of jobs here for Americans. And Mr. Johnson seems to support using tax
credits to accomplish these goals. He hasn’t voiced any
opposition to tax credits creating these incentives. So here
we have a huge area of agreement, and an agreement–do you agree,
Mr. Johnson, that at least in these areas that the tax breaks
are working and we are creating these jobs that are helping to
put people back to work in our own country? [Mr. Johnson] Tax cuts generally tend to do
that, yes, Mr. Chairman. [The Chairman] That is great. So from the
perspective of the billions of dollars that are going to be spent
in wind and solar and batteries and other programs, that
is good. You agree with that? [Mr. Johnson] Tax credits that stimulate the
economy and create jobs are good. [The Chairman] That is great. So that is a
big success story for us. And we do understand that you don’t
like spending Federal dollars on unemployment insurance
for unemployed Americans, but what we are trying to, as you
can probably appreciate, is we don’t like paying unemployment
benefits either. We actually hate the idea of unemployment
benefits if people can have a job. So we are trying to
create the jobs over here that could then make it unnecessary for
people to have to go in and to actually apply for unemployment
benefits. The evidence that we actually have that people
don’t like to collect unemployment benefits is that when
unemployment went down to 4 percent in our country, all the
people who are now unemployed actually took jobs and worked in
them. But when jobs are not available, unfortunately and much
to their own personal chagrin, they are forced to go in to accept
unemployment benefits. But we have evidence that every
single ethnic group in the United States, whites, blacks, Asians,
Hispanics, and male and female, all take jobs when they are
available to them. But unfortunately, because of a recession
induced by reckless mismanagement of the financial marketplace
during the Bush administration, almost turning a blind eye
to an oncoming economic disaster, we have seen a tremendously
high rate of unemployment. So that is the conundrum that
we face because we don’t–the reason we don’t want to pay unemployment
benefits is that we hate to see people unemployed. But
we recognize the moral necessity of helping people in those
times of desperation. These kinds of programs are working
and working very successfully. Let me turn back to the gentleman from Missouri
to see if he has any additional points he might want
to make. [Mr. Cleaver] One point and then a question.
Having grown up in public housing around poor people, I grew
up hearing that people had babies so they could get $190 a
month welfare and that people didn’t work. My father worked
on three jobs. He cleaned up the T.A. Litikan building on Saturday
mornings, worked at the Wichita Club as a maitre d’,
and then did yards on the weekends and sent four kids through
college. I can remember my father being unemployed, one of
the most miserable times of my life seeing him almost in a depression.
But the question related to what I have just said
is do you know how we know that, how we determine whether or not
people get unemployment compensation? Mr. Johnson, do
you know how we find out whether or not they get unemployment? [Mr. Johnson] Not off the top of my head. [Mr. Cleaver] Yes. And that is why this is
important, I think, because you said you thought it was
a disincentive for people to get jobs. The only people who can
get unemployment checks are the people looking for jobs. You
have to go to the State Unemployment Bureau seeking a job to
get unemployment compensation. So it is not a disincentive.
The only people who get this are out struggling trying to find
jobs. And as the chairman mentioned, they are not–8.4 million
jobs, when you say disincentive, I just want to make sure
you know that you have to look for a job to get the money. So you don’t think it is a disincentive now,
do you? [Mr. Johnson] I still think it is. I have
read several studies specifically from James Sherk, an
economist at the Heritage Foundation, that say several things
to the contrary of what you just stated, that it actually helps
prolong individuals not find finding work because
they are satisfied by having—- [Mr. Cleaver] But you didn’t know that you
couldn’t get that. You just said you didn’t know. [Mr. Johnson] I didn’t know off the top of
my head. I had heard that. [Mr. Cleaver] But now that you know, does
that fact–you can’t contradict that fact. It is a fact.
So knowing that fact, do you now change? [Mr. Johnson] It is also a fact that since
the stimulus package has been signed into law we have lost
3.3 million jobs. I am glad these individuals here are creating
jobs. And the Ohio weatherization program is a huge success.
I will grant them that. The Inspector General report even
recognizes it as a success. But it is one of the only States
having success with this program. There are individual success stories everywhere.
But the package as a whole and the reality is the
jobs have not been created since the stimulus package and that
was its goal, to create jobs. More work has been created for
certain individuals who have jobs, but the overall jobs impact
has not materialized. [Mr. Cleaver] So now that you know that the
fact that you have to be looking for a job to get an unemployment
check, now that you know that to be a fact, it is unquestionable,
if anybody in here can contradict it, you are
saying you still believe that it is a disincentive? [Mr. Johnson] I oppose extending unemployment
insurance benefits, yes. [Mr. Cleaver] But will you continue to say
it is a disincentive to provide those benefits? [Mr. Johnson] Until I see empirical data otherwise,
based on what I have read and learned in the past,
yes. [Mr. Cleaver] So you don’t believe what I
was just saying, that you have to be– [Mr. Johnson] I would be very interested to
see empirical data supporting what you are saying. [Mr. Cleaver] That you have to be–how do
you think you get the checks, people get checks? [Mr. Johnson] I am speaking of the disincentive
issue. I have read reports that showed that it was
a disincentive and it did disincentivize based on surveys, reports,
et cetera. [Mr. Cleaver] Okay, we are talking past each
other. And when somebody makes a good point I always say,
well, you made a good point. But since we can’t do that, I appreciate
very much you coming. One of the persons I spend a lot of time with
here is a Republican, and we absolutely have nothing
in common with regard to our political views. We just like
each other, and so we can argue and not get angry and still sit
down and have lunch. The one thing I guess we don’t do,
which is why we have a relationship, is because when he can prove
something, I say, okay, and the same on the other side. So I guess my frustration is that if you can
get anybody–I will wait here. Somebody call Heritage to
find out if I made up the fact that that is the only way you can
get your check, is looking for a job. I just–when you go out
and say it is a disincentive and people don’t know any differently,
they then begin to embrace the beliefs that there are
some people who are just lazy sitting around taking tax dollars.
And I grew up in a situation like that, seeing it and hearing
it, and it is really an insult to a got lot of good, hardworking
Americans. So I do appreciate your being here and I appreciate
your passion and hope that you will check my fact
down there and send me an email apologizing. Thank
you. [Mr. Johnson] Thank you. [The Chairman] So, have you had–when you
create these new jobs in solar or wind and weatherization,
do you find that there are a lot of people who want to work
as soon as you announce there are new jobs available? Do
you have any problem finding people who want to work as soon as
you put out an ad for new employees, Mr. Gaynor? [Mr. Gaynor] No, we have not had problems.
Just to give you one example, we have a small summer internship
program. We received 10 times the number of resumes. For
10 jobs, we received 100 resumes. [The Chairman] You get 10 times the applications
for new jobs as the number of new jobs you have. [Mr. Gaynor] For our summer internship program. [The Chairman] Have you had any problem, Ms.
Patt-McDaniel, finding people to work? Ms. Patt-McDaniel. No. We have people fighting
to get into our weatherization training programs to get
jobs; and the payment received is not family sustaining
wages, by any stretch. [The Chairman] Ms. Wright, do you have trouble
at Johnson Controls finding people who want to work when
you advertise for new employees? [Ms. Wright] We are very fortunate to have
a skilled automotive workforce in the area where our
plant is located, so we are very fortunate to be able to reemploy
them. [The Chairman] People who got laid off when
the auto industry collapsed and who were forced to
accept unemployment benefits, as soon as you advertised saying
you can come back to work they are on your doorstep? [Ms. Wright] We have very, very highly skilled,
experienced workers. [The Chairman] Beautiful. That is great news.
Some people believe that people enjoy being unemployed.
I think there is sufficient evidence that that is not the case
when a job is offered. Mr. Ashley, how about you? Do you find a lot
of people? [Mr. Ashley] We had 600 applications for the
last 30 jobs. A lot of people are desperate. [The Chairman] I agree with you. And, unfortunately,
570 people perhaps had to stay on unemployment,
but you were able to help 30 people get meaningful employment.
That is tremendous. So here is the good news. You want to see
a really good news story? Here is the picture of jobs lost
in the United States, and this is the Bush administration
over here in red. And as we reached January 20, 2009–we remember
that day quite vividly, January 20, 2009–780,000 jobs were
lost in January of 2009. As you can see, following on a pattern of
the preceding months of the Bush administration in terms
of this failed economic policy–kind of, if you don’t answer
calls at the SEC, there is a guy named Madoff that might be
bilking people, if you don’t regulate derivatives or swaps, you
kind of turned a blind eye to the whole impact that that could
have, and many other things–780,000 jobs in the month before,
700,000 the month before, 720,000, really not a good picture,
month after month. Then, in February of 2009, the Obama administration
arrives with a stimulus package. You can’t turn around
the Queen Mary overnight. But look what happened in the months
since then coming up to February. We almost have a reverse
image of what was happening during the Bush administration.
Month after month, we see fewer and fewer jobs being lost
in our economy. For one month there, November, it actually
went positive. We actually had job creation. And now we are
going down to a point where it is no more than 20, 30, 40,000 jobs
that we are losing per month. So you can see it is highly likely
that this is going to start spiking up with new job creation
in our country. Now, I would like to think that this economic
plan of the President is working, that the stimulus bill
is working, that the tax breaks are working, and that we are
turning a corner and that the Obama plan is the antidote to
the Bush plan, two different plans about how to run the economy. Now we didn’t cause the accident. We are out
in the street trying to clean it up. Some people start to
blame us for trying to clean up the accident, all that blood in
our economy. So, after a year, some people start to basically
confuse the people cleaning up after the accident with the people
who created it. And that is one of our problems. We admit
that. But it is a political problem from a messaging perspective,
not an economic problem from the perspective of how it is
working. And so what we are seeing in the testimony
we are hearing today from our witnesses is the incredible
success of the stimulus bill. And if I could ask you, do
you think 2010, Mr. Ashley, will be better than 2009 for the solar
industry? [Mr. Ashley] Yes, sir, I do. And, like I said,
we are sold out through mid 2011. [The Chairman] You are sold out now. That
is fantastic. Where would you be without the stimulus bill? [Mr. Ashley] We would not be in that situation. [The Chairman] You would not be. Mr. Gaynor, what does 2010 look like for you? [Mr. Gaynor] 2010 we expect to build 300 megawatts
of capacity this year, seven wind farms, one
of them we are just wrapping up. [The Chairman] Where would you be without
the stimulus plan? [Mr. Gaynor] It would be a much different
picture. [The Chairman] Would it be a better picture? [Mr. Gaynor] No, it would not be a much better
picture. It would be worse. Tough to quantify, but, again,
the thing that is important for our business is in a capital-intensive
business you are taking–what the Recovery Act is doing is not
only getting those dollars but you are taking a lot of dollars
in the private sector and pulling it off the sidelines to come
in and build wind farms. [The Chairman] So venture capitalists, other
investors, they are on the sidelines. They are saying, oh,
my goodness, look at all that blood in the economy; look at all
that red. But all of a sudden, in 2009, with the stimulus bill,
they are saying, maybe it is safe again; maybe we can go back
into those economic waters. And if there is going to
be some Federal money perhaps–and how many new private-sector dollars
were you able to attract in 2009? [Mr. Gaynor] Seven hundred million dollars. [The Chairman] Seven hundred million dollars
just for your one company. Amazing. That is a huge amount
of money. [Mr. Gaynor] For the 1603 project—- [The Chairman] Under the what project? [Mr. Gaynor] The wind stimulus. [The Chairman] The wind stimulus bill attracted–
unbelievable, just for your one company. That is fantastic. And, Ms. Wright, over here, in your battery
company, how many new jobs would you have created in the
United States in 2009 and 2010 without the stimulus program? [Ms. Wright] Very few. [The Chairman] By “very few”, what do you
mean by that? [Ms. Wright] Potentially some engineers in
our Milwaukee—- [The Chairman] When you say “some”, are
you talking about hundreds? [Ms. Wright] No, a handful. [The Chairman] What is a handful? Is that
a handful? Five people maybe? Now, because of the stimulus
bill how many do you think you will be creating? [Ms. Wright] We will be hiring engineers and
scientists in Wisconsin as we have—- [The Chairman] Give us some numbers. People
want to hear good news. People want to have hope that this
economic recovery is going to continue and the stimulus bill
is working. So how many new people do you think will get hired? [Ms. Wright] If you will indulge me for a
moment, the full capacity our plants in Holland will employ
550 people—- [The Chairman] Your plant is where? [Ms. Wright] Holland, Michigan. [The Chairman] Holland, Michigan. People think
Holland is in Europe. No, Holland is in Michigan. So how
many employees will you have in Holland, Michigan? [Ms. Wright] At full capacity, it will be
550, not to mention the supplier and the indirect jobs.
In Milwaukee, we will continue to hire engineers and scientists
to support our technology. [The Chairman] Wow. So, without the stimulus
bill, a handful, five; with the stimulus bill, 500
and more people who will be working who otherwise would not be
working here in the United States. And you wouldn’t even be building
a plant in the United States, is that you what you told us? [Ms. Wright] Correct. [The Chairman] You would be building it perhaps
in Holland, Europe, is that right? [Ms. Wright] In the Netherlands, Holland,
somewhere in Europe or Asia, that is correct. [The Chairman] So that wouldn’t be good news
for American workers. So this is really a fantastic good news story
for our country. And this energy sector just might
be the brightest of all the bright spots in the recovery bill
because it gives hope to families that there is going to be a source
of new jobs, from Mr. Cleaver and the smart grid they are
building in the most economically challenged part of Kansas
City, through Georgia with Mr. Ashley, and Mr. Gaynor’s
company that sprawls all across our country, Utah, Maine, and States
all across the our great country. Ms. Wright is in Wisconsin
and in Michigan with her new job creation. Ms. Patt-McDaniel in Ohio with 1,000 people
out there weatherizing homes in 2009, but many more
in 2010–is that correct–will be out there? And you can’t
offshore weatherizing jobs. You have got to be there in Ohio, you
have to be in Akron, you have to be in Canton. If you are
not there, it is not going to get weatherized. So those are,
by definition, domestic jobs. So these are engineers, carpenters, laborers,
scientists. It is across the entire economic spectrum
of our country, the people who are benefiting. So that is really
great news. And it helps us to reduce–and here is where
we will share our agreement with Mr. Johnson. It will reduce
the unemployment benefits that we have to pay out of our taxpayers’
dollars for people in our country, and that is one thing
we really do hope to achieve. Mr. Cleaver, do you have anything you would
like to add here? [Mr. Cleaver] You said it all, Mr. Chairman. [The Chairman] I thank you. Do you want to
say it again? I think we are just trying to make a point
here. You know, a lot of people, they don’t like–they didn’t
like statistics in school, which is why they didn’t take the
course. But a graph like this speaks for itself. It is the end of the Bush administration,
the beginning of the Obama administration, just two different
plans. In one, we were about to go off a cliff here with red
ink for our country, people unemployed, 780,000 new people unemployed.
You come forward 1 year, we are down 22,000 people
who newly entered into the unemployment rates. What an incredible
change, more than three-quarters of a million people fewer
who were unemployed this past month than the last month
of the Bush administration. And so this energy sector is something that
we are not going to walk away from. Your stories today
really give us hope for the future. They really make us believe
that we have a chance to create a new industrial sector in
our country, to back out imported oil, to not replace “made
by OPEC” with “made in China” without ever having a “made
in the USA” energy strategy. What you represent is that
alternative, the “made in the USA” strategy. We have used
tax benefits, loan guarantees in the stimulus bill in order to
accomplish that goal; and your story is tremendous. So here is what I will do. I will give each
one of you 1 minute to give us the one thought that you
want us to remember, 1 minute apiece without using 1603 or the
words tax credits. Try to put it in the simplest possible form
for the American people so they can understand what has happened
over the last year and what you want to see continue. So we will go in reverse order; and we will
begin with you Mr. Johnson. [Mr. Johnson] First, I want to thank the chairman
and the members for allowing me to come here today. I think in order to create real job growth,
we need to consider freezing all proposed tax increases
and costly regulations until unemployment falls at least
below 7 percent, freezing spending and restricting unspent
stimulus funds, reforming regulations to reduce unnecessary
business costs such as reforming Sarbanes-Oxley, reforming the
tort system to lower costs and uncertainty facing new businesses,
remove barriers to domestic energy production in Alaska and the
Outer Continental Shelf, completely repeal the job-killing Davis-Bacon
Act, pass pending free trade agreements with South Korea,
Colombia, and Panama, and reduce taxes on companies’ foreign
earnings if they bring those earnings home. I think those are all sustainable, and we
need to incorporate in all of the above energy approach
working with the individuals here today. And I thank you
very much for having me. [The Chairman] Thank you. Mr. Ashley. [Mr. Ashley] Thank you, Mr. Chairman; and,
again, I am proud to be here before the committee today. The key thing I would like to leave you with
is please continue to help us build this renewable energy
resource, an economy here in the United States rather than
abroad. Many of the countries are very serious about this
industry. They want to own this industry. We want the jobs to
stay here in the U.S. We want to be competitive in the rest of the
world. Programs like the Ex-Im Bank, and they are
wonderful, offer facilities which we have also used, and others
are helping a lot and DOE loan guarantees. But the stimulus
that you started and you are doing is really helping us, and
it will make a big difference for jobs and I think the security
of this country going forward. [The Chairman] Thank you, Mr. Ashley. Ms. Wright. [Ms. Wright] Thank you very much, Mr. Markey
and committee members. Because of your actions, we have
made a commitment to be here in the United States versus being
somewhere else; and we have also made a commitment to stand up
the industry and the entire value chain so we can drive domestic
capability and competency. We need your help in creating the demands.
So, for short term, while the market is sorting itself out,
we can drive scale, drive the economics so we can employ
these people and we can employ them sustainably and stand on our
own without subsidies and without incentives. Because
that is how we want it to work. But I would implore you to help
us make sure that we leverage these investments that the U.S.
Government and the U.S. taxpayers have made and the faith they
have put in us and make sure we leverage those vehicles and that
demand with the components and the systems that were made
from those tax dollars here in the United States so that
we do have a U.S. battery cartel, not Asian battery cartel. [The Chairman] I love it. Thank you. Ms. Patt-McDaniel. Ms. Patt-McDaniel. I want to say that Ohio
is very happy to make use of our Recovery Act funds. I already
talked about our weatherization. We are using our other energy
dollars to invest in the growth of those industries. For example, in our wind supply chain, we
have 600 companies who are providing parts to turbines
and are also creating jobs. We continue to use that money
to incent industry and leverage more growth and job creation. I really appreciate the opportunity to speak,
and we would like to have additional assistance from the
Federal Government to continue to grow those jobs in Ohio. [The Chairman] Beautiful. Thank you. Mr. Gaynor. [Mr. Gaynor] Thank you, Mr. Chairman; and
I also want to extend my thanks for allowing me to testify
here today. We are just at the beginning. We have got
a long, long way to go; and I would encourage he Congress to
continue to send those strong policy signals to the private
sector. Over the long term, that is probably a Federal renewable
energy standard. In the short term, as the financial
crisis and the financial markets continue to heal, could
be an extension of the convertible ITC. So those are my parting thoughts. Thank you
very much. [The Chairman] We thank you so much. And I know everyone watching C-SPAN wants
to learn more about a convertible ITC. But I understand
what you are saying. But our job is to put it into English. So
what we will do is we will pass a renewable electricity standard
for the United States. So we have a goal of 15 percent, 20
percent of all electricity generated from renewables because,
by definition, they are here in America. We have to use our
own energy resources to do that. And we will put the
tax breaks, we will put the loan guarantees in place so that the
private sector will step up and create this engine of growth
in our own country, creating ultimately hundreds of thousands
of new jobs just in this energy sector alone and, again,
meeting the challenge of importing too much oil from OPEC
and trying to avoid a situation where we are importing our
batteries, our solar, and our wind technologies from China.
We have to avoid it. We need a plan. America is at its best when
it has a plan, and the Obama administration has begun to
put together that plan. We see the early results, which are
fantastic; and we are now going to work to expand upon it this year
and next. We thank you all for testifying here today. [Whereupon, at 11:30 a.m., the committee was
adjourned.]

  • new energy investment $90 bn (renewable energy investment)

    solar energy recreates job market = 10,000 jobs..whopping figure.

  • Put america back to work! You still have not done what you said you would! I want the America you promised. July 25th 2011 its time you make the jobs come back… you lied!

  • For decades ALL "conventional" forms of energy production depended on government subsidies. Favourable regulations, investment security gurantees or loan gurantees.
    As a result of this long standing policy you got centralized power production, regional & global oligopoles and massive dependencies.
    The result is the total lack of market forces in the energy sector without any meaningful competition.
    Energy autonomy through renewable energy changes that and brings value adding back home => jobs

  • Do you think any of these are honest ?

    Look at the golden fringe on the flag and the golden laurel on the navy blue this is a committee of the crown !

  • These clowns need to get out of the way and let AMERICANS do what they do best. Work. More federal regulations = less work. This green nonsense will have us at $8 a gallon before long and the economy will grind to a halt.

  • It would be a shame if you did not earn more cash quickly when these people earn income quicker so easily with Smarter Money Maker (search for it on google).

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