Can the Department of Energy Really Spend All That Money?
Posted February 17th, 2009 at 4.48pm in Energy and Environment.
Or should the question be how much will they waste?
Economist Arnold Kling has a list of risks associated with a large stimulus. Number one on the list is: It is harder to spend larger amounts quickly and cost-effectively. One of Obama’s chief economists, Larry Summers, emphasized that stimulus spending must be quick and temporary. That doesn’t seem to be the case with the energy projects in the bill.
From the WSJ:
Minnesota’s Sage Electrochromics Inc. has been ready for months to move on just the sort of project the Obama administration hopes will bolster the U.S. economy: a $65 million factory that would make energy-saving windows and generate 250 new jobs.
So what’s holding it up? The Energy Department, whose fledgling loan-guarantee office has yet to approve a single project, including the proposed Sage glass factory, since the loan program launched in early 2007.
President Barack Obama plans to rely heavily on agencies like the Energy Department to approve contracts and issue loan guarantees and grants at a record clip in the $789 billion stimulus plan.
The spending demands could prove particularly taxing at the DOE. The Energy Department has had limited experience pulling off big, transformative energy projects. Most of the department’s $25 billion budget goes toward maintaining the nation’s nuclear stockpile, cleaning up former weapons plants, and doing basic scientific research.”
The article goes on to discuss the history of delays associated with the DOE. The question now becomes: What’s worse? The wasted spending that will result from the stimulus bill or the chance that the Obama administration and Congress will take credit for the economy successfully recovering. Number five on Kling’s list against the big stimulus reads: There is a risk that much of the spending will kick in after a recovery is underway.

February 17, 2009 C Meier, Pleasanton, CA writes:
What big projects, other than nuclear stockpile stewardship, does the DOE have? For years they have been unable to sustain big energy and science projects for lack of congressional support and funding. Result: we have stopped long term research on magnetic confinement fusion and intertial confinement fusion that can deliver our energy needs in the next century. We have also abandonded our big science projects such as the Superconducting Super Collider which could have made historic stides in high energy physics, crucial in harnessing new energy technologies. Today, the DOE is not prepared to handle large scale projects as there is vitrually nothing they do, outside of the weapons program, that is large scale nor do they have nothing in the pipeline. There are some DOE sites and federal locations that could rather quickly, with the help of industry, install large wind farms with little envirnomental impact. Two of these locations are the Nevada Test Site and Site 300 near their laboratory in Livermore, CA. These are small potatoes projects when there are billions to spend, but at least they are unlikely to waste a lot of taxpayer dollars. Perhaps they could also fund co-generation plants for several of the government sites as again, with the help of industry, these can be done quickly and efficiently. Who knows, maybe someone from the DOE will read this and get some ideas. Hope springs eternal.