U.S. Chamber Study Highlights National, Nevada Economic Losses Due To Stalled Energy Projects

CARSON CITY – The U.S. Chamber of Commerce released a first-of-its-kind economic study today identifying stalled energy projects – including 10 in Nevada – that are costing billions of dollars in lost gross domestic product.
The study says the delays are costing the state’s economy $66.9 billion in GDP and that 86,700 jobs a year could be created in Nevada during the construction phase of the projects.
The study estimates the potential loss of investment and jobs in the 351 proposed solar, renewable, coal, natural gas, nuclear, and transmission projects in 49 states. The dollar value is $577 billion.
“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.
It was based on an initial chamber review as of March 2010 of all the energy projects being sought by developers that could not get permits, called “Project No Project.”
“These are projects that would create jobs in Nevada and give a much-needed boost to the state’s economy, but with every day that passes, the more expensive the projects become,” Kovacs said. “In most cases, if the projects are substantially delayed they won’t be built.”
The 10 projects identified in Nevada include the Yucca Mountain nuclear waste repository, which has been abandoned by the Obama Administration, although several states are challenging that decision in federal court.
The U.S. Chamber of Commerce supports the project.
Four of the stalled projects identified in Nevada are alternative energy projects, including the Duke Energy Wind Project at Searchlight, the New Comstock Wind Energy Project, the Crescent Dunes Solar Project, and the Virginia Peak Wind Project.
Four others are coal projects and one is a transmission line.
U.S. Sen. Harry Reid has in the past stated his opposition to the development of coal-fired energy plants in Nevada.
Pociask said not all of the 351 projects evaluated in his study are probably worthy of being built, nor would anyone expect them all to be constructed.
But even if just the top project in each state was allowed to go forward, the economic value would be significant, he said.
The permitting process used to approve these energy projects needs to be streamlined, Pociask said.
“What we need to have is a fair review process,” he said.
The report comes out at the same time Nevada officials are seeking help from federal officials to clear the way for permits to be approved so mining companies can expand and hire more workers. Gov. Brian Sandoval, who met with officials on a recent trip to Washington, DC, said there are several permits awaiting action that mining officials have told him could lead to the creation of 1,000 high-paying jobs in rural Nevada.
“The concern for me was that there are several permits that are pending before the BLM that have been there for years,” he said.
On Wednesday, state Sen. Dean Rhoads, R-Tuscarora, introduced a resolution urging the federal government and other governmental entities to expedite and streamline the requirements for conducting mining operations in Nevada.
Among the Nevada projects highlighted in the chamber study is NV Energy’s proposal to upgrade an existing line to a 20-wire, 230-kilovolt line to help meet projected energy needs for the Las Vegas Valley.
The project drew opposition from Henderson residents, who said that their lifestyle was threatened by the proposed transmission line. After several hearings, the Henderson Planning Commission voted in June 2009 unanimously to deny NV Energy’s proposal.
The route preferred by the commission would have added $19.5 million to the total project cost, which NV Energy had rejected. NV Energy litigated the matter, and in May 2010 the Clark County District Court upheld the Henderson Planning Commission’s rejection of the project.
“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 Nevada could be affected if it moved forward on just two projects.”
Kovacs said in the report that these energy projects, “are being stalled, stopped, or outright killed nationwide due to ‘Not In My Back Yard’ (NIMBY) activism, a broken permitting process and a system that allows limitless challenges by opponents of development.”
Audio clips:
U.S. Chamber official William Kovacs says the study reviews projects sought by developers that could not get permits:
031011Kovacs1 :20 get a permit.”
Kovacs says the longer the projects are delayed, the more likely they won’t go forward:
031011Kovacs2 :16 ever moving forward.”
Chamber study author Steve Pociask says not all of the 351 projects are viable:
031011Pociask1 :19 terms of jobs.”
Pociask says the initial investment value of the projects was $577 billion:
031011Pociask2 :16 up these projects.”