Agencies slow to implement new energy programs
BYLINE: Kent Hoover
As Congress considers new measures to fight global warming, senators criticized the Bush administration for moving too slowly to implement programs passed in 2005 to finance alternative energy projects and help small businesses use less electricity.
The Department of Energy, for example, is only at the pre-application stage for a government-guaranteed loan program that Congress created to spur private-sector investment in biomass, solar and clean coal projects. The administration also has capped the size of the program and made it less attractive to lenders by reducing the amount of the guarantee.
The 2005 energy act also directed the Small Business Administration to create a clearinghouse of energy information for small businesses. The SBA has been working on this project, an agency official says, but it didn't become a priority until a Senate committee held a hearing on it.
Meanwhile, President Bush wants to reduce the budget for the Environmental Protection Agency's Energy Star program, which promotes energy-efficient appliances, buildings and business practices. Only two full-time employees work in the Energy Star division that targets small businesses, which consume nearly half of the electricity and natural gas used in the United States for commercial and industrial purposes.
Most climate scientists believe the burning of fossil fuels, such as oil and coal, has caused the Earth's surface temperatures to increase and could lead to rising sea levels.
Sen. John Kerry, D-Mass, who chairs the Senate Small Business and Entrepreneurship Committee, says small businesses will play a critical role in reducing greenhouse gas emissions, both as technology innovators and places where energy consumption can be cut significantly.
Sen. Olympia Snowe of Maine, the committee's ranking Republican, agrees. Small businesses that use less energy not only will help the environment, they also will save money, she notes. The EPA and the SBA, however, are not doing enough to spread the word about energy efficiency, she says.
Project financing lags VC
Venture capital investments in U.S. energy technology companies increased 262 percent last year to $2.4 billion, according to Clean Edge Inc., a research and consulting firm.
But these investments are microscopic compared with what's needed to get the economy off a fossil fuel diet, says John Denniston, a partner with Kleiner Perkins Caufield & Byers.
Plus, investment in steel-in-the-ground projects that actually produce alternative energy is lagging, says Dan Reicher, who directs Google's investments in clean energy projects.
This is where government support, through loan guarantees and long-term tax incentives, can make a difference, Denniston and Reicher say.
More than 140 companies submitted pre-applications for the Department of Energy's loan guarantees.
Delays may send projects abroad
Interest in the loan guarantees is high "even without having a program that's worth very much," says Sen. Pete Domenici, R-N.M., the ranking Republican on the Senate Energy and Natural Resources Committee.
Domenici is disappointed the Department of Energy still isn't ready to issue any loan guarantees -- Bodman says the department will look at the pre-applications and then invite some of the companies to submit final applications.
The senator also says Congress envisioned a much more robust program than the $9 billion in loan guarantees proposed for next year. Also troubling, Domenici says, is the Bush administration's decision to limit the government guarantee to 80 percent of the loan amount instead of 80 percent of the project's total costs.
This, in effect, reduces the guarantee on projects where funds besides the government-guaranteed loan are used.