Friday, March 11, 2011

US Chamber Says Stalled Energy Projects Cost Illinois $41.9 Billion, 67,000 Jobs

WASHINGTON, D.C.—As part of its Project No Project initiative, the U.S. Chamber of Commerce released a first-of-its-kind economic study today identifying 15 stalled energy projects in Illinois that in aggregate are costing the state’s economy $40.9 billion in GDP and 67,600 jobs a year that could be created during the construction phase of these projects alone.

“This study should serve as a wake-up call for legislative action to improve the permitting process,” said William Kovacs, U.S. Chamber senior vice president of Environment, Technology and Regulatory Affairs during today’s unveiling of Project Denied: The Potential Economic Impact of Permitting Challenges Facing Proposed Energy Projects. The study by TeleNomic Research was conducted by Steve Pociask, President of the American Consumer Institute, and Joseph Fuhr, Professor of Economics at Widener University and Senior Fellow at the American Consumer Institute. “These are projects that would create jobs in Illinois and give a much-needed boost to the state’s economy, but with every day that passes, the more expensive the projects become. In most cases, if the projects are substantially delayed they won’t be built.”

The study estimates the potential loss of investment and jobs in the 351 proposed renewable, coal, natural gas, nuclear, and transmission projects in 49 states—including 15 in Illinois—that have been delayed or cancelled due to “Not in My Back Yard” (NIMBY) activism, a broken permitting process, and a system that allows for limitless lawsuits by opponents. The study features a state-by-state analysis that details the economic output and jobs that could be created by acting on these stagnant projects. The study’s findings are detailed on the user-friendly site, which features an in-depth breakdown of every stalled project.

Among the Illinois projects highlighted in the study is the Navitas Energy Baileyville Wind Farm, an 80-turbine wind farm in Ogle County, first proposed in late 2004. Patricia Muscarello, an Arizona woman who took Ogle County and Navitas Energy to court over the proposed wind farm in January 2006, filed an identical lawsuit in January 2010 in Winnebago County. Ms. Muscarello owns property in both Ogle and Winnebago Counties that she claims would be adversely affected by turbines. She also opposed the mechanisms that allowed the wind farms to be built. As of November 7, 2010, the project remains stalled, and a settlement seems unlikely.

“In going through the study, the results were simply startling,” said Peter Morici, former chief economist at the International Trade Commission, and the study’s peer reviewer. “We anticipated the impact all the projects collectively would have on jobs and the economy. But the real surprise was how positively Illinois could be affected if it moved forward on just one or two projects. To my knowledge, there is no database like this anywhere in the world.”

Among the notable findings of the study is the fact that almost half of the projects identified in the study are renewable energy projects. Other highlights include:

Investment Phase – Planning and construction of the study’s projects would generate $577 billion in direct investment and would result in an approximately $1.1 trillion increase in U.S. Gross Domestic Product (GDP). An estimated 1.9 million jobs would be required during each year of construction.

Operations Phase – Operation of the study’s projects would generate $99 billion in direct annual output and would yield $145 billion in increased GDP annually. An estimated average of 791,200 jobs would be created per year of operation.

Total Benefits – If constructed and operated for twenty years, the study estimates a total benefit of $3.4 trillion in GDP, including $1.4 trillion in employment earnings and an additional one million jobs per year.
The Chamber recognizes that moving forward on all the projects is highly unlikely. To address that, the study includes a sensitivity analysis, which examines the jobs and economic data if only some projects were approved.

“The numbers tell the story,” said Kovacs. “Moving forward on a significant number of these projects could mean millions of jobs and do wonders for our economy. With our study, Congress can now point to tangible data on the regulatory barriers to economic growth. Now is the time to act to remove unreasonable obstacles and restore balance to a broken process. It’s essential to American jobs and competitiveness.”

The full study is available here:

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

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