Obama Campaign Video Touts Dubious Green Energy 'Success' Story

The Obama-Biden campaign recently released the video "Our Jobs Come from the Wind," whose title comes from the words of Steve Smiley, CEO of Heron Wind Manufacturing of Traverse City, Michigan. The video holds up Heron Wind as a validation of Obama's approach to job creation. Unfortunately, Heron is hardly a rousing success story.

The story told by Smiley is that "when the economic crisis hit" bank loans dried up, and President Obama stepped in with "investments in renewable energy" that created new jobs, reduced our dependence on foreign oil, and "improved society."  According to Smiley, "the policies that President Obama has put forward has [sic] been a great benefit to a small business like mine. Heron Wind recently received a loan that was supported by President Obama."

This loan for just under a million dollars came from the Michigan Strategic Fund, with funding coming from Obama's Recovery Act.  According to Mr. Smiley, the money enabled him to hire 8 to 10 employees to "produce two to three turbines."

In the video we meet one of these employees, James Black, Lead Turbine Technician, who, "had been interviewing with [Smiley] for over six months." Quite a long interview.

It turns out that Heron Wind Manufacturing does not actually manufacture wind turbines. Their website describes what they do in vague terms: "Landing in Summer 2012, Heron Wind is bringing the latest in blade technology to the market." On Heron's "Affiliates" webpage, we read:

Global Blade Technologies (GBT) is cooperating with Heron Wind's design team to create the STAR blades...GBT originates in the Netherlands and has brought their quality blade production capabilities to their new USA-based manufacturing facilities.

The GBT manufacturing facility is not however Heron Manufacturing; it is located in Evansville, Illinois.

Heron Wind has three ongoing projects. The Ogemaw Rose Community Wind Project, near Rose City, Michigan, is the company's flagship, and is described as "a 30 to 50 megawatt wind project with a total capital cost of approximately $60 to $100 million."

The low estimate therefore would require installation of 40 of the STAR 750-Kw turbines -- a huge order for a small company. Things were looking good when, as reported in the Ogemaw County Herald, the "Ogemaw County Planning Commission voted unanimously Nov. 16 [2011] to allow Smiley Energy Services LLC to begin constructing windmills in the county." This spring however, the Planning Commission, in response to complaints by residents about noise pollution from wind turbines, imposed a six-month moratorium on the project.  One of the Commissioners raised the concern that "most of our information has been coming from the developer [Smiley]."

On June 9, 2012, Smiley appealed to the Commission to lift the moratorium, but, the Herald reports, "No decisions were made to lift or shorten the moratorium." The story continues:

Smiley said he needs to break ground on the projects prior to the end of the year in order to be guaranteed a 30 percent investment tax credit that goes directly against the project, which he said is what makes them economically feasible.  [...]

"Under the federal stimulus law requirements for the 30 percent investment tax credit, if we can't proceed by the end of this year, we're likely to lose that. We don't know. There's maybe a small chance that could be extended, but we would likely lose it in the economics, and it would be very difficult without that."

This disastrous news for Heron came out well in advance of the Obama-Biden video released on August 3, 2012, yet the fact that the touted "jobs coming from wind" are in jeopardy is never mentioned. Perhaps "jobs gone with the wind" didn't seem as uplifting. And by the way, Mr. Smiley's actual words were, "our jobs comes [sic] from the wind." It's not a good start when even the title tries to make the reality look better.

The video footage filmed in the winter of 2012 (there's snow on the ground), gives the impression of Smiley moving forward with a project on a local farm. Smiley's statement is nebulous, that he had "signed a lease." Furthermore, the man identified in the video as a "farmer" is Mark Fisk, who bears the same name as the spokesman for "Michigan Energy, Michigan Jobs," a group lobbying for a ballot initiative to increase Michigan's renewable energy standards.

Heron's remaining two projects are tiny; White Earth Nation Community Wind (a.k.a., Gaa-waabaabiganikaag), and the Saginaw-Chippewa Indian Tribe are each constructing a single 750-Kw turbine. For comparison, natural gas or coal-fired plants are commonly in the 750-Mw range -- a thousand times the size, producing three thousand times as much electricity when the capacity factor is taken into account.

The White Earth turbine has been underway since 2003, with financial assistance from the Department of Energy's National Renewable Energy Laboratory, along with Congressional earmarks in 2005 and 2007, and a grant from the Blandin Foundation.

The Saginaw Chippewa wind tower began with feasibility grants in 2004, and is proceeding with funding from Congressional earmarks, "Housing Grants and an Energy Efficiency Community Block Grant." A Central Michigan Life story in September 2010 was titled "Saginaw Chippewa Indian Tribe starts using wind energy," which wasn't quite accurate since the story notes that the Tribe "will install their first wind turbine this fall." A follow-up story in January 2012 remains optimistic: "The wind turbine is scheduled to be completed this summer, but there is no exact date set."

It may seem curious that two of Heron's three projects are on Indian lands, but there's a simple explanation: government grants and loans.  In addition to the federal money mentioned above, the White Earth Economic Development Office, bearing the unfortunate acronym WEEDO, lists some of the "Tax Incentives for Business Growth":

  • New Markets Credit (Federal - IRS)
  • Depreciation of Property Used on Indian Reservations (Federal - IRS)
  • Indian Employment Credit (Federal - IRS)
  • Work Opportunity Credit (Federal - IRS)
  • Welfare to Work Credit (Federal - IRS)
  • HUBZone
  • Business Procurement Incentive (Federal - Small Business Administration)
  • Job Opportunity Building Zones (JOBZ) (State of Minnesota )

In addition, White Earth received a "U.S. Department of Labor -- Pathways Out of Poverty grant of $3 million for training reservation residents in green technology -- weatherization auditing, manufacturing, wind technology." 

In sum, the Obama-Biden campaign's model manufacturing company does not manufacture wind turbines. It has a moratorium on its one commercial project, and has been struggling for over eight years to get a couple lousy windmills built. It hired 8-10 employees based on Obama's encouragement, but layoffs will be coming if the Ogemaw Rose project fails to get approval. Meanwhile a few states over, in Williston, North Dakota, there are currently 3,000 to 4,000 job openings in the Bakken shale fields -- created without any of the tangled web of government programs, grants and loans that always seem to accompany renewable energy projects.