Govt Clean Energy Programs Are a Success Story: How 60 Minutes Missed the Mark

DOE programs have dramatically sped up cleantech development and provided billions in net economic benefits to society, reports show.

In the 60 Minutes "Cleantech Crash" segment that aired Jan. 5., Leslie Stahl argued that money has been frittered away on clean energy technology. Various reports tell a different story.

An episode on the CBS News program 60 Minutes entitled "The Cleantech Crash" has drawn derisive reviews from advocates of clean, renewable and energy-saving technologies, who say it was biased and distorted the government's and the private sector's record of successful innovation in the field.

In the Jan. 5 report on energy innovation, correspondent Leslie Stahl declared that "the federal government has allocated a total of $150 billion to cleantech through loans, grants and tax breaks with little to show for it."

Critics of the program struck back, armed with ample evidence to the contrary.

Even after taking account of the many slips, wrong turns and outright failures along the way, the clean energy programs of the federal government have scored many big-payoff successes over the decades, with the support of Republican and Democratic presidents and lawmakers alike. Together, they constitute one of the best-documented technology success stories since the Pentagon gave the world GPS.

There may be a strong case to be made that other approaches—like a carbon tax providing a cash incentive to invent cheap, clean alternatives to fossil fuels—would be even more efficient in driving cleantech innovation.

But it's not easy to make the case that there's nothing to show for the clean energy investments so far, however scattershot they may have been.

As recently as 2010, the Department of Energy (DOE) hired contractors to take a look back at its R&D spending since its founding in the 1970s on four key clean technologies—solar, wind, vehicle efficiency and geothermal—and to compare the costs and benefits that have resulted. In each case, the lengthy and detailed reports found, the payoff far exceeded the cost.

Stahl didn't say where her $150 billion cost figure came from. And she made no estimate at all of the dollar benefits that have resulted.

The DOE's entire budget is just $27 billion or so a year, and most of it goes for work related to nuclear weapons. The government does indeed spend extensively to support clean energy research and development—it has guaranteed tens of billions of dollars in loans, and the tax code subsidizes essentially every form of energy, clean or dirty.

These tax subsidies—not loans, grants or other direct investments—make up the lion's share of government support for clean energy, especially in recent years. Some of the biggest credits, like those for wind production of electricity and for homeowners who invest in efficiency improvements, have just expired. There's a big fight under way in Congress over which forms of energy deserve the most federal support, so whatever 60 Minutes said on the subject was bound to raise somebody's hackles.

Even before the show went on the air, fans of green energy could see from the trailer that CBS would not be painting a pretty picture. And they were quick to ridicule the show's main takeaway point—that money has been frittered away on clean energy technology.

After all, they noted, most of the newly installed power generation capacity switched on in the past year came from the solar and wind programs that have enjoyed increasing federal support in recent years. Efficient, hybrid and electric cars are scoring big in the market, thanks in part to a variety of federal programs. There's a solar miniboom under way on Wall Street—a bubble, some might suspect—but hardly a crash. Clean energy industries supported by the government employ tens of thousands of people.

And whatever the definition of cleantech, the increased energy efficiency of the American economy and the lower carbon footprint of energy production in recent years have already sliced greenhouse gas emissions—a benefit unnoticed by 60 Minutes, its critics complained, as its script never even alluded to climate change.

So the critics had plenty of ammunition to aim at the program. For examples of the reaction to the "Cleantech Crash" story, see this, and this, and this, and this, and this

60 Minutes said the DOE refused to give it an interview. If so, that may be a price the show pays for its hard-hitting style. But the department's justification for its spending is a matter of public record, not a mystery. One broad description of what the DOE calls a "green energy revolution" was provided by the agency in this overview a few months ago. It describes how wind, solar, LED lighting and electric vehicles are becoming cost competitive and are taking the market by storm—with LEDs alone expected to save consumers tens of billions of dollars in the coming years.

For a much more detailed review of how the department's programs have performed over the years, there are four reports available online, each running a hundred pages or so, that in 2010 examined the costs and benefits of the DOE's work in various novel technologies.

From 1975 to 2008, one of the reports found, Congress provided about $7.5 billion (in 1978 dollars) for work on solar energy; about half went toward solar photovoltaic technology. The net economic benefits of just a few of these technologies, the researchers estimated, amounted to $18.7 billion—much more than the government put in.

The study examined several of these solar programs in detail. One, the Flat-Plate Solar Array Project, which lasted from 1975 to 1985, is now "universally regarded" as "foundational" to the whole photovoltaic industry, the study said. Another, the PV Manufacturing Technology Project, helped drive production up by 5,700 percent and costs down by 78 percent between 1991 and 2008. A third, the Thin-Film PV Partnerships, "vastly improved" the next generation of solar modules.

Because of the federal support, solar progress came 12 years faster that might have otherwise been the case, and PV production costs dropped below $2 per watt instead of staying above $5, industry officials, academics and lab scientists told the researchers.

"Most experts interviewed for this analysis concluded that without these programs not only would the state of photovoltaics be significantly poorer, but many U.S. companies, which employ thousands of people, would not exist," the report said.

A similar study of the department's wind research programs likewise found that the returns on the $1 billion it invested in early wind research considerably outstripped the cost. (Notably, billions of dollars in benefits were attributed to the reductions in illness and deaths from the air pollution that was avoided by installation of non-polluting wind turbines.) The study found that the government's investment sped up the industry's development by six years, and that without that funding the amount of wind generation in 2008 would have been about two-thirds lower. The returns from this early investment continue to accrue.

The key to the wind program, in the early days, was the rapid dissemination of fundamental knowledge.

"Knowledge of the complex physics of wind turbines was incomplete in the early days of the DOE Wind Energy Program," the study said. "Designers used trial-and-error methods and large safety factors in order to avoid frequent turbine failures. The low reliability of turbines meant that wind energy costs were substantially higher than the cost of conventional electricity generation. Over the subsequent decades, significant advances in knowledge have made it possible to build large, utility-scale wind turbines with high reliability and at costs competitive with conventional electricity generation."

Only later would the wind production tax credit, or PTC, kick in, causing a rapid acceleration of wind power in recent years. The PTC is now expiring, unless Congress votes to extend it.

"The PTC was important. Without the PTC, additional delays beyond the six year delay from R&D underinvestment would have been likely," the 2010 report said. "Experts stressed, however, that without prior R&D investments in infrastructure technologies leading to lower cost of energy, improved reliability and availability, the PTC was unlikely to have been effective on its own."

The other two reports, each equally detailed, show how benefits have exceeded costs by even wider margins in the department's programs for efficient vehicles and geothermal energy than in solar and wind.

Advanced vehicle research is a hallmark of DOE research into energy efficiency. The 2010 report zeroed in on a single strand of investigation sponsored by the department: the use of lasers and optical devices to understand the dynamics of combustion inside a diesel truck engine. Even the most avid auto buff has probably not heard of this work, using lab techniques like laser Raman spectroscopy, laser Doppler velocimetry and Mie scattering. The department, over the years, spent nearly $1 billion on this line of research. The bet paid off, the report said, at about 53 to 1. Engine efficiency improved by nearly 5 percent, saving billions of gallons of fuel.

The geothermal study was especially striking, finding benefits exceeding costs by 295 to 1. That was mostly from a single innovation—polycrystalline diamond compact drill bits—whose development began in the renewable energy research labs but ultimately spread through the oil and gas industry, where most of the estimated economic benefit actually was cashed in.

None of this is to suggest that the DOE is beyond reproach. In particular, the Governmental Accountability Office has found that its programs and others that encourage wind power and other renewable energy technologies are often tangled, duplicative or overlapping—in a word, inefficient.

But in fairness, just as the venerable 60 Minutes has more than 100 Emmy awards to its credit, the DOE can boast of more than 100 Nobel Prizes won by researchers it supported. To tar the whole enterprise of government support for clean technology with the well-worn brush of the collapse of Solyndra—the solar device maker that went bankrupt after accepting $500 million in DOE loan guarantees—is like claiming that every 60 Minutes eyebrow-raiser is another Benghazi debacle.

The White House, on its blog, posted this rejoinder by Dan Utech, director for energy and climate change at its Domestic Policy Council. It didn't mention 60 Minutes, but the point was clear enough: Government investment is stoking clean energy progress.

To some, 60 Minutes can be forgiven for taking a hardboiled attitude and emphasizing the failures in what is, after all, a costly government program that showers benefits on big industry. To others, though, CBS's classic bad-cop roughing up of DOE was especially odd given the show's recent treatment of government eavesdropping programs and another institution in the limelight, the National Security Agency, which critics had called obsequious.

This time, the critics suggested, CBS seemed determined to turn a silk purse into a sow's ear.

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