For many green energy companies, profligate federal spending is a gift that keeps on giving. The noble goal of “promoting renewable energy production” provides a veil for large, politically connected firms to double- or even triple-dip in Uncle Sam’s many unsustainable “sustainability” programs.
Let’s start with the Export-Import Bank. The federal export-credit corporation, which extends loans, guarantees, and insurance policies to private companies to purchase U.S. products, is rightfully facing challenges to its uncertain reauthorization vote this September. Opponents argue that the Export-Import Bank is rife with cronyism and provides dubious benefits for U.S. taxpayers while assuming unacceptable levels of risk exposure.
Fewer know that the Export-Import Bank is also a hefty player in the green energy racket. According to public data, the bank has generously increased assistance to “clean” energy and sustainability-related projects in recent years, representing roughly 11 percent of the bank’s portfolio since 2007.
Natural gas projects, deemed “clean energy” by the Environmental Protection Agency, received $11.8 billion in Ex-Im assistance from FY 2007 to FY 2014, or 62 percent of the green portfolio. Solar energy enjoyed 20 percent of the portfolio, with $3.7 billion in assistance. Nuclear projects received roughly $1.8 billion in assistance, while wind projects received $1 billion in assistance.
Many of the lucky firms that received Ex-Im assistance also enjoyed benefits from other federal subsidy programs. Firms that were fortunate enough to also receive cash under the Department of Treasury’s 1603 program raked in another combined $22 billion in Ex-Im assistance over the last seven years.
Among those companies, we find giant manufacturer and D.C. fixture General Electric. It received $20 billion in Ex-Im green-related assistance since 2007. Another $4 billion of 1603 cash went to support wind farms that use GE turbines.
We see similar patterns with other federal green energy programs like the Department of Energy’s controversial 1703, 1705, and AVTM loan programs. Companies that are rich in green energy benefits seem to only get richer.
In some cases, one can wonder if the firm’s political connections have played a role in its good fortune. Take the Spanish multinational Abengoa. The company benefited from $2.8 billion in assistance from DOE’s 1705, $203.9 million in help from the Export-Import Bank, and significant money from Treasury’s 1603 for its project in Minnesota and another project in Arizona.
As it turns out, former vice president and green-energy advocate Al Gore bought a large stake in Abengoa in 2007. Former New Mexico governor (and Obama administration ally) Bill Richardson is a member of the Abengoa International Advisory Board. Richardson was also a member of the 2013 Advisory Committee that guides Ex-Im policy.
In 2012, the Department of the Interior also fast-tracked approval for Abengoa loans; the firm received generous investment tax credits to open its (Obama-endorsed) Solana project in 2008; the predominately U.S.-funded Inter-American Development Bank, where Richardson sat on its selection committee, awarded Abengoa a $41 million loan for a wind-energy project; and Abengoa received a special $2 million “SunShot” award grant from DOE in 2013. And we shouldn’t forget that Bill Richardson is a former DOE secretary.
U.S. car manufacturers, too, enjoyed a fair amount of double-dipping into federal coffers for their green energy activities. Ford Motors, for instance, received almost $1 billion in Ex-Im assistance since 2007 while also raking in roughly $6 billion through the DOE’s Advanced Technology Vehicles Manufacturing (ATVM) program. Tesla Motors, the fast growing electric car company, also received a $465 million loan from DOE’s ATVM. This federal generosity pairs nicely with the $34.7 million tax break it scored from the state of California last December and the variety of federal and states tax breaks the company enjoys.
The American Recovery and Reinvestment Act of 2009 (ARRA), better known as the “stimulus,” provided more venues for double-dipping. The Green Mountain Energy, a subsidiary of mega-moocher NRG Energy, received two generous stimulus grants in 2011. Likewise, Reliant Energy and Reliant Energy Tax Retail LLC, two other NRG Energy companies, reported receiving at least 37 grants under the ARRA. These grants augmented the $3.8 billion in Section 1705 loan guarantees for NRG. NRG was also eligible to receive $430 million from the section 1603.
The worst part? Federal agencies can’t even keep track of where the money went!
A December 2013 report by the Treasury Inspector General for Tax Administration raised alarms that many companies receiving benefits under the 1603 program also filed for illegal tax credits. The IRS admits that it has no way to check who is getting what benefits. The all-you-can-eat green subsidy buffet has been wide open for business, and there’s no telling who devoured most of this wasted feast.
Large corporations don’t only double-dip into the Ex-Im Bank sustainability portfolio or other various green energy programs; it just happens that “sustainable energy production” is what’s on the menu for this administration. The best way to put an end to this corporate gluttony is to abolish all subsidies to private companies in whatever industry they appear.