Obama Criticizes Keystone Jobs—What about Renewable Jobs?

        In September 2008, then-candidate Barack Obama claimed at a speech in Golden, Colo., that his planned investments in “green” energy would create “five million new jobs that pay well and can’t ever be outsourced.”

Bill O’Reilly of Fox News interviewed Barack Obama recently, questioning him about Keystone jobs, among other issues. In the interview, which aired on Super Bowl game day, O’Reilly noted that the pipeline would generate 42,000 jobs. President Obama quickly cut in. He said:

“First of all, it’s not 42,000. That’s not correct. It’s a couple thousand to build the pipeline.”[i]

So, who is correct? Actually, it depends on the definition of ‘job’. According to the latest State Department environmental impact report, the Keystone project would create 42,100 direct, indirect, and induced jobs. About 3,900 of those jobs are expected to be temporary construction jobs. Once built over a 2-year period, the pipeline would support 50 permanent jobs.

Last July, Obama called the jobs created by the pipeline “a blip relative to the need.” But, how does this blip compare to renewable jobs that he has touted?

According to the National Resource Defense Council (NRDC), American wind provides manufacturing, construction and operation jobs for around 75,000 Americans. The organization says a typical 250 megawatt wind farm (around 100 turbines) will create 1,073 jobs over the lifetime of the project. But that would mean that the 60,000 megawatts of wind turbines would produce 257,520 jobs eventually, 3.4 times more than the 75,000 the organization quotes now.

The American Wind Energy Association (AWEA) cites a higher number of 80,700 wind-related jobs at the end of 2012 that includes development, siting, construction, transportation, manufacturing, operations, and services. In other words, the entire U.S. wind industry only supplies about twice the number of jobs that a single pipeline would generate. AWEA indicates that total direct and indirect jobs in 2012 in Texas—the state that ranks first in wind-related jobs–is around 10,000 of those jobs.  The remaining 38 states with wind activity must apparently account for the other 70,000 jobs.

According to the Solar Foundation, the U.S. solar industry employed 142,698 Americans as of November 2013. The foundation defines that job number as those workers who spend at least 50 percent of their time supporting solar-related activities. The Solar Census 2013 shows that installation firms constituted the largest sector of employment in the solar industry, employing 69,658 solar workers, slightly less than half. Over the last year, solar manufacturing employment increased to 29,851 jobs, an increase of only about 100 jobs, after losing 8,000 jobs in 2012. The other job categories that the Solar Foundation cites are sales and distribution (19,771 jobs), project development (12,169 jobs) and “other” (11,248 jobs).

According to the solar and wind organizations’ statistics, therefore, there are 223,398 solar and wind jobs—about 4 percent of President’s Obama’s 5 million job number for ’green energy’. According to an analysis by Dave Swenson, an Iowa State University economist, ethanol supports 45,934 jobs across the country, or about the same that the Keystone pipeline would support. That brings the ‘green jobs’ number up to 5 percent of Obama’s 5 million jobs number.[ii] Of course, there are other industries to consider, such as electric vehicles. But, the message is pretty clear that there are a lot of jobs associated with just one pipeline, the Keystone XL, that compare favorably with President Obama’s individual “green industries”.

Issues with Job Estimates and Renewable Energy

One must remember that ‘green’ industries are not just American industries; American companies must compete economically for sales against foreign companies. Proponents of ‘green energy’ industries believe that the subsidies given to consumers create sales of their products, which produce manufacturing jobs for those products.  However, taxpayers are subsidizing not just American jobs, but foreign jobs (and a worsening trade deficit) as well.  This is also the case with photovoltaic panels, as Chinese manufacturers gain market share in the United States and elsewhere and with electric vehicles that manufacturers across the globe are dabbling in.[iii]

But even if the ‘green jobs’ remain here, the jobs created are “gross” jobs not “net” jobs because those jobs deter the creation of other jobs.  Subsidizing ‘green jobs’ takes money from productive parts of the economy and transfers that money to unproductive parts which require either subsidies or mandates to survive. If manufacturers are forced through subsidies or mandates to make products that the public does not want as evidenced by their unwillingness to buy them absent such government programs, it hurts the overall economy and destroys jobs elsewhere that the economy would have created organically, through consumer choice.

This is just what President Obama is doing by forcing the manufacture of electric vehicles and other ‘green’ technologies that the country is not buying or would not buy without the subsidies that the government is providing or the mandates they are imposing. For example, in 2013, the best sales year since 2007 for U.S. auto makers, U.S. consumers bought 15.6 million vehicles, an increase of 7.6 percent from 2012 sales. But, full electric and plug-in electric vehicles accounted for only 96,600 vehicles,[iv] or 0.6 percent of total sales, despite the $7,500 tax credit that the federal government provides buyers. In 2013, purchases of light trucks and sport-utility vehicles exceeded those of cars as the public bought larger, safer, and more utilitarian vehicles despite gasoline prices at over $3 a gallon.[v]  Yet, the Obama Administration is forcing auto manufacturers to produce electric vehicles, and paying consumers to buy them.

Another telling sign is that renewable energy investment in the United States fell 8.4 percent to $48.4 billion last year. The decline in renewable investment was not just in the United States. It fell 41 percent in Europe as its electricity costs have soared, and 12 percent globally to $254 billion. 2013 is the second year in a row that renewable investments declined.[vi]

The European Union and the German government last month announced that they were rolling back subsidies and mandates for renewable energy due to staggering costs. Spain is $35 billion in debt (the “tariff deficit”) due to renewable-energy subsidies. Renewable-energy subsidies in Germany are costing consumers about $32 billion a year.[vii] On January 21, Sigmar Gabriel, Germany’s economy and energy minister, indicated that his country would be risking “dramatic deindustrialization“[viii] if it doesn’t reduce energy costs. According to the European Commission, the current level of state support for renewable energy sources must be phased out by the end of the decade because it views onshore wind and solar power industries as “mature” and being able to operate without support from taxpayers. European Union governments are forbidden from providing long-term “state aid” to domestic industries that can function without support.[ix]

Conclusion

It is time to take a good look at the energy policies the President supports versus those that are  just a ‘blip’ to see whether the expense of ‘green energy’ to consumers and taxpayers are right for Americans. We only need to assess Europe’s experiences to get the answer, and deindustrialization of the United States, as Germany now fears about itself, is not something the Administration has been candid about with its citizens.