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Tom Zeller Jr.

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Solyndra And Keystone XL: Partisan Politics And Energy In America

Posted: 10/07/11 01:38 PM ET

Something is backwards here.

With gleeful relish, Republicans in Congress have seized on the story of Solyndra, the California solar panel company that received a $535 million federal loan guarantee, only to go belly-up at the end of August. They've uncovered emails that suggest haste among Obama administration officials to award the financing, and as such they've condemned the federal loan guarantee program from which it sprang.

On Thursday, Republicans claimed a casualty in the resignation of Jonathan Silver, who has headed the loan program since 2009.

In a joint statement issued Thursday, Republican Representatives Cliff Stearns of Florida and John Upton of Michigan, who are leading the charge to politicize the Solyndra failure and widen its ramifications, suggested that won't be enough.

"Mr. Silver's resignation does not solve the problem," they wrote.

But what exactly is the problem? According to a cache of letters compiled by the Center for American Progress, at least 62 Republicans, including Stearns and Upton, have sought lucrative government loans and subsidies for clean-energy projects in their own districts. Never mind, too, that more than three dozen other companies, including some in the nuclear industry, have received some $36 billion in federal financing through loan guarantee programs that trace their roots to the Bush administration.

Those programs, which involve some risk, are designed to encourage private investment in, and help spur the growth of, technologies that don't ultimately rely on burning coal, oil or natural gas. Given Republicans' own efforts to tap those funds, these would seem to be attractive goals, whatever your politics.

And why not? According to a recent Brookings Institution analysis, the burgeoning clean-tech sector already employs 2.7 million workers -- more than the fossil fuel industries. The study also found that "newer clean economy establishments -- especially those in young energy-related segments such as wind energy, solar PV, and smart grid -- added jobs at a torrid pace" between 2003 and 2010.

Those numbers were lost on Darrell Issa, the California Republican who chairs the House Oversight and Government Reform committee. "Today, unemployment is at a staggering 9.2 percent," he declared at the opening of a hearing into the Solyndra collapse last month -- a hearing Issa dubbed "How Obama's Green Energy Agenda is Killing Jobs."

"The ill-fated green jobs experiment has done little to create jobs or speed this recovery," he said, "and by many accounts it has had the opposite effect."

Issa didn't mention that he had sent numerous letters to the Department of Energy over the years seeking grants for clean-energy firms in his own neck of the woods.

Go figure.

Meanwhile, amid the frothing over Solyndra, more than 1,000 Americans were arrested in Washington while protesting a massive, $7 billion pipeline proposal, known as the Keystone XL, that could transport nearly 1 million barrels per day of an unconventional and highly polluting form of Canadian crude some 1,700 miles and deliver them to refineries in Texas.

The plan, which some analyses have suggested would only add to a substantial over-capacity of pipeline running between Canada and the U.S., has generated stiff opposition in states through which the pipeline would cut. Among other things, critics fear a leak in the line could permanently sully a 174,000 square-mile aquifer in the American heartland and contribute irrevocably to global warming.

On these concerns, Republicans on Capitol Hill have not made a peep -- though they've been remarkably vocal about the pipeline's potential to create some 20,000 temporary construction and manufacturing jobs, more than 100,000 ancillary jobs, and to help wean the nation off of more volatile sources of foreign oil. They even passed a bill in the House over the summer that would require the State Department, in whose hands approval of the line rests, to render a decision by the first of November.

But those jobs estimates, as well as the impact of the pipeline on U.S. energy independence, have been repeatedly debunked, including by a study released at the end of last month by Cornell University's Global Labor Institute. Using numbers compiled by the company behind the project, Calgary-based TransCanada, the Cornell analysis found that the project would create fewer than 5,000 construction jobs, and a substantially smaller number of indirect jobs overall.

The pipeline "will not be a major source of U.S. jobs, nor will it play any substantial role at all in putting Americans back to work," the authors of the Cornell study assert, adding that even if the 120,000 total jobs number was accurate, "the U.S. seasonally adjusted unemployment rate would remain at 9.1 percent -- exactly where it is now."

On providing oil to U.S. markets from a friendly source, the Cornell analysis concluded that the Keystone XL pipeline would actually divert Canadian oil from Midwest refineries, "so it can be sold at higher prices to the Gulf Coast and export markets. As a result, consumers in the Midwest could be paying 10 to 20 cents more per gallon for gasoline and diesel fuel."

The higher gas prices -- estimated to total between $2 billion and $4 billion -- would drive down other spending, the study concluded, and result in job losses that would further offset whatever small gains the pipeline might represent.

And for all this, it is Solyndra that is called a "scandal" -- though no one really needs to spend much time puzzling over why. The oil and gas industries have contributed more than a quarter billion dollars to candidates in Washington over the last 20 years. Roughly 75 percent of that went to Republicans.

As for the Democrats, a small group have repeatedly urged the Obama administration to halt the Keystone permitting process amid myriad environmental concerns and, more recently, evidence that the State Department has planned all along to grant the permit no matter what.

"As increased scrutiny is applied to the approval process and the issues with the pipeline," said Congressman Steve Cohen (D-Tenn.), in an email, "I am seeing a growing number of Congressmen publicly state that the approval process has been highly flawed and that the pipeline is a bad idea."

But many other Democrats have been muted on both Keystone and Solyndra -- perhaps wanting to appear neither anti-employment at such a tough economic time, nor too supportive of what might have been poor judgement in granting a loan to a company with a bad business model in the first place. On Keystone, they also risk finding themselves in the position of attacking the Obama administration generally, and Secretary Hillary Clinton's State Departement specifically.

The State Department is expected to render a decision on whether to grant Keystone a permit by the end of the year.

Meanwhile, don't look for Republicans to stand in the way, no matter the arguments against it.

"Republicans are the party of oil," said Daniel J. Weiss, a senior fellow and the director of climate strategy at the Center for American Progress. "They are not going to do anything that will put oil in a bad light. So any hints of impropriety in moving the pipeline forward is not something they're going to be interested in doing."

And in any case, they'll be too busy sifting obsessively, and with great fanfare, through the rubble of a single California solar company.

Such are the politics of energy leading into the 2012 election. The proximate questions in each case -- whether the government should continue to help spur clean-energy technologies like solar power, and whether the government should grant a permit to build yet one more oil pipeline -- do a nice job of articulating the line between past and future that the nation now straddles so awkwardly, and with such bitter partisan paralysis.

Don't look for movement anytime soon.