THE economy is wobbly, oil prices are rising and voters have climate change on their minds. What better, surely, than a “green stimulus”? Barack Obama duly set aside some $39 billion of February’s $787 billion stimulus bill for the Department of Energy, hoping to create lots of sustainable, high-tech “green jobs”. Steven Chu, the secretary of energy, was in Iowa on June 22nd to announce $16m in spending—soon to grow to $40m—on green fuels and energy efficiency there. “I want to shove this money out the door as quickly as possible,” said the secretary. And well he might. Just $5.8 billion of that $39 billion had been allocated as of June 19th. The department is trying hard to spend the cash faster, and has since then made a flurry of announcements (see article).
Why has spending money proved so hard, when the whole point of the stimulus was to jolt the economy quickly? One problem is structural: the department has historically focused mainly on America’s nuclear-weapons stockpile. The modern role of funding green-energy projects has grown in prominence, but that old priority still sucks up the biggest share of the department’s people and money.
The second difficulty is the sheer size of the stimulus: the extra $39 billion dwarfs the department’s pre-stimulus total annual budget of just $26 billion. The department was already the largest civilian contracting agency in the government (only the Pentagon is bigger), and was already understaffed. From 1998 to 2008 its procurement grew by 61% while its staff numbers went up by just 20%. Now the amount of money it has to push out of the door is greater still; but there are obvious dangers in trying to move it out too quickly.
Besides awarding new types of contracts and grants, the Department of Energy has pre-existing loan-guarantee and direct-loan programmes for energy projects that have been boosted by the stimulus money. When Mr Chu took office, he was said to be infuriated by how slowly the loan-guarantee programme was working. The department’s chief adviser for stimulus spending, Matt Rogers, says that simple changes have been made: it no longer takes three months just to appoint a financial analyst or engineer to investigate an application. And the number of staff overseeing the loan-guarantee schemes is meant almost to triple, from 35 to 95, this year.
The department has also made an unusual appeal. Earlier this year it asked universities and trade associations for volunteer experts to help vet loan applications. Two weeks later more than 2,000 boffins had offered help. The experts are being sorted into specialist teams and will soon start scrutinising applications.
Some of the projects still have their critics. Mr Chu was in Iowa to boost corn-based ethanol, a fuel that is barely greener than petrol. And the administration is reviving FutureGen, a pilot project to burn coal and produce electricity while capturing and storing the carbon; the Bush administration had abandoned it, and many see it as a boondoggle for big coal and a sop to electorally crucial coal states. Once cap-and-trade is in place (if it ever passes the Senate), it will be easier for the market to have its say on such schemes.
Source : http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=348924&story_id=13956120