New report shows even clean energy projects are dying in regulatory nightmares

Amanda Carey Contributor
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While the Obama administration has repeatedly pushed for the development of a renewable energy industry, its regulatory process is strangling clean energy projects before they even get off the ground, according to a report released Thursday by the U.S. Chamber of Commerce’s “Project No Project” initiative.

The study, which was meant to quantify the economic impact of stalled energy projects due to regulatory burdens, found that there are more renewable energy projects currently caught up in red tape than projects in the fossil fuel industry.

The report by TeleNomic Research, titled “Project Denied: The Potential Economic Impact of Permitting Challenges Facing Proposed Energy Projects,” was conducted by Steve Pociask, president of the American Consumer Institute, and Joseph Fuhr, economics professor at Widener University and senior fellow at the American Consumer Institute.

“The fact that we ended up having more renewable projects than coal was probably the biggest surprise in the entire study,” said Bill Kovacs, U.S. Chamber senior vice president of Environment, Technology and Regulatory Affairs.

“But it shouldn’t be,” Kovacs told The Daily Caller, adding that they decided to do the report during the height of the recession when the focus was on “shovel-ready projects.”

“We were starting to see more and more coal and gas, but we were also starting to see renewable projects too,” Kovacs said of projects caught up in red tape. “We sent a stinging letter to the Hill on the stimulus program, saying that unless Congress enacts legislation to address this problem, even green jobs will struggle.”

One specific project Kovacs mentioned is Sunrise Power, a renewable power plant in California that waited on a permit from 1980 to February 2011.

All together, the authors found 351 stalled energy projects around the country that they say, in the aggregate, are costing the U.S. economy $1.1 trillion in GDP and at least 1.9 million jobs in 49 states. The reasons for the delays, say the authors, are what they call “Not In My Back Yard” activism, a broken permitting process and a system that allows for never-ending lawsuits.

In Colorado, for example, the Colorado State University Green Power Project for wind power is currently “in progress, with opposition.” The $500 million project would power the school’s main campus, but opponents – mainly local property owners – are challenging the project on the grounds that it would not meet sufficient funding or wind velocity requirements.

In Florence County, South Carolina, construction for a Pee Dee Facility for coal has been cancelled. Though the project faced massive opposition from the Sierra Club and other environmental groups, the necessary permits were obtained by February 2009. However, in August of that year, developers cancelled the project due to regulatory uncertainty over federal regulations on carbon dioxide emissions.

The coal facility is just one of three projects in South Carolina that have been stalled. All together, the projects would have produced an average of 58,000 jobs a year, according to the report.

California has a staggering 32 stalled energy projects, with a total economic output of more than $59 billion, the report says. One of them, the SunPower California Valley Solar Ranch, is stalled because local residents haven’t warmed to the idea of the proliferation of solar projects in their area. The project has also had to wait because the site is home to 13 different species the federal government has deemed endangered, which means the impact on the local environment has to be assessed by biologists.

If completed, the project will deliver an average of 550,000 megawatt-hours of clean electricity annually.

“The reason we did it is because as people talk about jobs, you really can’t develop jobs until you find some way to put facilities through the permit process,” Kovacs told TheDC.

But the fact that even renewable energy projects – something the Obama administration champions at every opportunity – is experiencing more difficulties with bureaucratic red tape than the fossil fuel industry is, said Kovacs, “the biggest shocker on the whole project.”

The report is now being circulated on Capitol Hill.