Thursday, January 27, 2011

Ireland and China Back Obama’s Clean Energy Policy in Illinois

President Obama’s bold new goal that “by 2035, 80% of America’s electricity will come from clean energy sources” will be getting hard dollar backing from China’s Xinjiang Goldwind Science and Technology Company Ltd. and Ireland’s Dublin based Mainstream Renewable Power, Ltd. which plan to begin construction this coming July of the Shady Oaks wind farm in Lee County’s Brooklyn Township near Compton, Illinois. Last month the Illinois Power Agency awarded Goldwind the successful bid on the 106.5 megawatt Shady Oaks project, which will consist of 71 Goldwind 1.5 megawatt permanent magnet direct drive wind turbines, and is planned to produce enough power for 30,000 homes in the community.

Goldwind and Mainstream expect to spend about $200 million building the wind farm, which is projected to produce 120 construction jobs and 10 or 12 permanent jobs once the project goes into commercial operation. The Shady Oaks wind farm will sell electricity to Commonwealth Edison under a 20 year power purchase agreement. Commercial operation of the facility is planned for the second quarter of 2012.

Major U. S. manufacturing participation in the project comes through Goldwind’s purchase of $26 million in bearings for the wind turbines from Canton, Ohio based Timken Company.

Goldwind USA CEO Tim Rosenzweig remarked: “We are elated to have been selected to build this project and to bring critical jobs and opportunity to the local wind industry in Illinois.” Mainstream CEO Eddie O’Connor chimed in with the comment: “Our success today comes down to the strength of our relationship with Goldwind and our joint mission to provide low-cost, reliable renewable energy to the U. S.”

Wednesday, January 26, 2011

State of the Union – What’s In It for the Construction Industry?

President Obama is a Chicago bred politician, and as such he knows road building contractors are some of the most generous political donors among business people. Yet, in his State of the Union speech, he only glanced briefly in their direction. And, while clean energy construction also got a brief nod, there was nothing specific in the speech for either construction industry sector to hang its hat on. Furthermore, events in the House of Representatives since the speech ended make any hope of significantly increased infrastructure spending legislation look bleaker than ever.

True, Obama did vaguely refer to a budget that will invest “especially [in] clean energy technology,” and proposed taking subsidy dollars from oil companies and using them to set “a new goal: by 2035, 80% of America’s electricity will come from clean energy sources.” Does this mean his plan is to raise oil and natural gas prices to levels which will make “clean” electricity economically competitive?

Obama proposed that the executive branch should seize control of the allocation of federal infrastructure funding from Congress by throwing down the gauntlet with this bold and impractical challenge: “If a bill comes to my desk with earmarks inside, I will veto it.” That should serve to bring federal expenditures for infrastructure construction to a screeching halt. Unless, of course, he means the earmarks will already be inserted into his proposed budget legislation.

During the middle of the address, Obama said a few things which sounded promising for the construction industry. “The third step in winning the future is rebuilding America.” He mentioned high speed rail – for which billions were appropriated in the stimulus package – and which is already meeting resistance from newly elected Republican governors in some of the states which won high speed rail stimulus grants. He promised to “put more Americans to work repairing crumbling roads and bridges.” However, three pages down the teleprompter, he also proposed to “freeze annual domestic spending for the next five years.”

In the tempest of House leadership changes, and the absence of detailed proposals from either side of the aisle, it is difficult to say what these remarks will translate into in terms of appropriations legislation, other than to predict, “not much.” The federal Highway Trust Fund reauthorization legislation is now in the hands of the House Transportation and Infrastructure Committee, which just held its first organizational meeting this morning under the leadership of Chairman John L. Mica of Florida and Highways and Transit Subcommittee Chairman John J. Duncan, Jr. of Tennessee. No one yet knows what is on the Committee’s agenda, or for that matter on the Obama administration’s agenda, by way of fulfilling Obama’s State of the Union promise that long term Highway Trust Fund reauthorization legislation will be “fully paid for, attract private investment, and pick projects based on what’s best for the economy,” other than Congressman Duncan’s statement that “Increasing the gas tax is not the solution to addressing our infrastructure needs.”

Yes, we knew that two years ago when the Democrats ruled the House. So far, neither side of the aisle has put forth a viable alternative to higher motor fuel taxes, however. Congressman Duncan’s subcommittee website says “We must eliminate unnecessary bureaucratic red tape so that infrastructure projects can be built in half the time and taxpayer funds can be spent more efficiently.” Are they talking about eliminating environmental impact reviews?

In a statement issued just this morning, Duncan announced that “Today the House of Representatives passed a resolution to roll back non-security spending to 2008 levels.” At that pace, no motor fuel tax increase would be required to replenish the Highway Trust Fund.

So, despite the rhetoric, or perhaps because of it, I can be confident of only one thing: there won’t be any significant increase in infrastructure funding at the federal level any time soon.

Thursday, January 13, 2011

Another Blow To Illinois Clean Energy

The waning hours of the lame duck Illinois Senate session struck another blow against clean power generation in Illinois as the Illinois Senate defeated by a vote of 33-18 a bill authorizing Tenaska, Inc. to proceed with construction of the proposed $3.5 billion coal gasification/carbon capture and sequestration power plant near Taylorville. Over the last five years the State of Illinois has invested $23 million of the $40 million spent by Tenaska in planning and development expenditures for the proposed project.

Taylorville Mayor Greg Brotherton, who hung around the statehouse during the final vote in the wee hours of Wednesday morning, remains optimistic Tenaska may find other sources of funding to complete construction of the facility, though he expressed exasperation at the workings of the Illinois legislature. “It was a learning experience for me the past five or six weeks, and seeing how the legislature works, it’s just unreal,” Brotherton exclaimed.

Mary L. Renner, Director of the Taylorville/Christian County Economic Development Corporation, said the Energy Center site remains viable for other energy related development even if Tenaska pulls out of the carbon capture/coal gasification project. “To be able to draw this kind of attention says a great deal for the natural resources there,” said Renner.

Opponents of the bill asserted that the legislation would have required Illinois electric utilities to purchase power from the newly built facility at above market prices for the next 30 years in order to recover the state subsidized cost of building and operating the environmentally conscious, greenhouse gas limiting facility. “It would have been damaging to the state’s job-creation climate,” said Philip O’Connor, chairman of the Coalition to Stop Tenaska’s Overpriced Power.

Tenaska vice president Bart Ford said his company is not yet prepared to say it will walk away from its own $40 million dollar investment in the project, despite the Illinois Senate’s resounding defeat of the authorizing legislation. “We are currently evaluating our next course of action,” said Ford. “We believe there is a great deal of support in Illinois for the idea of clean coal power.”

The apparent collapse of this local effort at greenhouse gas control puts Illinois in the company of several European carbon capture and sequestration projects which have faltered due to the unfavorable economic factors involved in bringing carbon capture technology up to commercial scale.