Saul Loeb/AFP/Getty Images
President Obama speaks at Smith Electric Vehicles in Kansas City, Mo., last week. The White House compares today's green technology grants to early investments in the Internet. Smith Electric received a $32 million Recovery Act grant.
President Obama speaks at Smith Electric Vehicles in Kansas City, Mo., last week. The White House compares today's green technology grants to early investments in the Internet. Smith Electric received a $32 million Recovery Act grant. Saul Loeb/AFP/Getty Images
On Thursday, for the second time in two weeks, President Obama will deliver an economic pep talk at a company that has received Recovery Act funds for electric car batteries. He has recently given similar speeches at companies that create solar panels, wind turbines and biofuel.
The Recovery Act has provided billions of dollars in matching grants for clean energy programs. Despite this massive infusion of federal money, it is unlikely that these technologies will make a dent in Americans' fossil fuel consumption anytime soon.
Clean technologies such as solar and wind power are growing at dramatic rates, says John Denniston of the venture capital firm Kleiner Perkins Caufield & Byers. "Seven or eight years ago, the solar industry was tiny," he says. "Today, globally the solar energy market is a $50 billion industry. That surpassed, last year, the size of the global online advertising industry."
But those technologies still make up a minute fraction of Americans' energy use.
"Wind energy is about 1 percent of America's total energy supply," says Daniel Yergin, president of IHS Cambridge Energy Research Associates. "Solar is about one-hundredth of 1 percent of our total energy supply."
As James Sweeney, who directs the Precourt Energy Efficiency Center at Stanford University, puts it: "You can talk about large percentages of tiny, small numbers and get a 'gee whiz' factor without making much significance to the U.S. economy."
But that doesn't faze Denniston. "Back in 1980, you could have looked at the number of personal computers in the country and said, if you multiply that tenfold, it wouldn't make a difference. Or in 1985, look at the number of cell phones that were being used."
David McNew/Getty Images
Production of wind power, via turbines like these near Palm Springs, Calif., has grown annually. But its overall contribution to the U.S. energy grid remains small.
Production of wind power, via turbines like these near Palm Springs, Calif., has grown annually. But its overall contribution to the U.S. energy grid remains small. David McNew/Getty Images
White House aides sometimes compare today's green technology grants to an investment in the early days of the Internet.
But Yergin says the Internet analogy is not perfect, "because there was nothing it needed to displace; we didn't have an old Internet that was going to be replaced by a new Internet."
In contrast, there are entrenched companies that have been providing energy from oil, coal and natural gas for decades.
"Energy innovation has historically occurred in a multi-decade time frame," says Matt Rogers, who handles Recovery Act grants for the Department of Energy. "Coal showed up in about the 1860s, and by about 1910 it was really humming. Oil started making big inroads during World War I, and it really became the dominant fuel in the 1960s. So it tends to be over those long cycles that you see a shift of double-digit percentages in usage."
The Obama administration is betting that we are at the beginning of such a cycle right now, and the White House wants to make sure the U.S. has a piece of the action.
"We're trying to create a new foundation for economic recovery and economic growth ... that gets America competing in the industries of tomorrow, so that when you open up the hood of your Chevy Volt, the battery says 'Made in America,' not made somewhere else," White House spokesman Robert Gibbs said Tuesday.
A Faster Way?
Other countries have been making this investment for years, Sweeney says. "We're behind much of the world in the energy technologies, even for those that we've invented."
While Sweeney supports the new investment in green energy, he says it's not the quickest way to get Americans off fossil fuels.
"Initiatives to more efficiently use energy can have much larger impacts over the next two decades than we can have by the programs to promote new clean energy supplies," he says.
The Obama administration has energy-efficiency programs, but the president doesn't talk about them weekly the way he does clean energy. That may be because discussions about insulating your house aren't as sexy as mapping out the energy economy of the future.