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In the 2010 mid-term elections, Republicans won a lot of seats by running against government spending and especially the stimulus. The Romney campaign revived that theme in an ad that asks ‘Where did all the money go?’
The answer in the ad is not subtle. Image after image of dollar bills go up in flames. "So where did the Obama stimulus money go? Windmills from China," the ad says.
It also mentions cars from Finland, which we dealt with in a separate fact-check. For this one, we’ll focus on whether stimulus money paid for windmills from China.
Windmills from China have something of a history when it comes to political messaging. PolitiFact looked into Sarah Palin’s claim that nearly all of the renewable energy stimulus dollars went to Chinese turbine makers. We rated that False. A version came up again this year in the Ohio federal Senate race. PolitiFact found that the Republican making the charge believed that a large wind project in Texas would have purchased 300 Chinese turbines. In fact, that project never got off the ground.
The concern over foreign beneficiaries of taxpayer money is not exclusively Republican territory. Sen. Chuck Schumer, D-N.Y., has raised a stir about the fraction of money for renewable energy going to foreign businesses.
The Romney campaign sent us supporting documents for the ad’s claim. Among the reports and articles they cite, one refers to that massive project in Texas that was never built and will never receive stimulus money. Others stem from the Investigative Reporting Workshop, a nonprofit journalism project at American University.
The Investigative Reporting Workshop’s report backs up the ad’s claim but paints a murkier picture than the Romney campaign would have you think. The author tallied $2.6 million in stimulus money going to Chinese makers of wind turbines. However, the reporter, Russ Choma, also says that none of the farms used turbines entirely built in China. Additionally, he couldn’t say for sure how much stimulus money made its way to China. "Some money definitely did, but it is safe to say more money went to creating jobs in the U.S. and Europe," he wrote.
A Challenging Money Trail
Federal support for renewable energy projects came through the 1603 tax credit program. So far, this program has paid out about $5.2 billion to wind farms nationwide. Once a project is on line and delivering power, that program pays money to the project developer -- as much as 30 percent of the project cost. Along the way, the developer pays the companies that provided the materials. Following the money becomes complicated because wind turbines are about as intricate as airplanes.
To choose an example, let’s look at a wind farm going up in Alaska. The lead contractor is General Electric, the world’s third-largest supplier of wind turbines and an American firm. But according to the Anchorage Daily News, "The blades are made in Brazil, the units that contain the generator come from Southern California, the connecting hubs from the Florida Panhandle and the towers are made in China."
This $65 million project isn’t eligible for the 1603 money until it begins producing power. When it does, it could receive as much as $20 million from Washington. More detailed information would be needed to assign those funds to the manufacturers.
We called the American Wind Energy Association, an industry trade group, to see if they knew of any Chinese turbines paid for with American stimulus dollars. They said they did. Their best guess is the number is six -- five in Texas and one in Iowa. But "that might not be exactly right," said Liz Salerno, director of industry data and analysis. "Because some of the blades and towers in Texas might have come from American firms."
If it is six, that represents a tiny fraction of all the turbines installed with stimulus dollars. Salerno says the program funded more than 12,000 turbine installations over three years. Chinese components might have shown up in various places, but if one is counting complete Chinese "windmills," then they account for less than 1 percent of the total.
Elsewhere, we have reported that due to the limited size of the American wind energy industry, most of the stimulus money to expand wind power went to foreign companies or their American-based subsidiaries. That does not mean that every dollar left the country. Some foreign companies built manufacturing plants in the U.S., for example.
That created jobs for American workers. The U.S. Energy Department estimates that the 1603 program went to projects that involved between 95,000 and 155,000 jobs. Those estimates cover all kinds of renewable energy generation work, but wind projects got over 80 percent of the funds. Manufacturing jobs in the wind industry began growing in 2005, and that trend continued through 2011. They now number about 30,000, according to the American Wind Energy Association.
Mitt Romney’s ad said that stimulus dollars paid for windmills from China.
By depicting dollars going up in flames, the ad suggests that the U.S. gained nothing from the stimulus spending, and the money largely went to countries such as China.
In reality, many American firms connected to the wind industry expanded during the years of the stimulus. Only a small fraction of the money spent on wind energy went to China.
This statement contains a grain of truth but ignores other information. We rate it Mostly False.
Romney for President, Where Did All the Money Go?, July 18, 2012
PolitiFact Ohio, Josh Mandel says Sherrod Brown is responsible for Ohio jobs moving to China, March 1, 2012
PolitiFact, Palin claims that most of the renewable energy stimulus dollars have gone to Chinese turbinemakers, February 23, 2010
FactCheck.org, Stimulus Jobs In China?, October 29, 2010
Investigative Reporting Workshop, Workshop's Wind Stories Kicking Up Political Dust, September 27, 2010
ABC News, New Wind Farms In The U.S. Do Not Bring Jobs, February 9, 2010
Washington Post, Obama’s Record On Outsourcing Draws Criticism From The Left , June 9, 2012
Anchorage Daily News, Turbines Rising at Fire Island, Wind Farm July 19, 2012
Reuters, U.S. Renewable Energy Group, China’s Shenyang Power Group, and Cielo Wind Power to Develop a 600MW Wind Farm in Texas, October 29, 2009
Investigative Reporting Workshop, Powerful Democrats help Chinese energy firm chase stimulus money December 10, 2010
Spinning Star Energy, Projects
Recharge, Shenyang Power tabs Chinese firm for Texas wind farm, May 3, 2011
Greenwire, DOE disputes senators' claims of stimulus grants flowing overseas, March 4, 2010
A-Power Energy, Shenyang Power Group Signs Letter of Intent for Cooperative Development of Wind Power Generation Plant in Texas, May 3, 2011
Windustry, Stimulating Wind Energy and Jobs in the U.S., March 4, 2010
U.S. Treasury Department, Overview and Status Update of the 1603 Program, February 25, 2011
American Wind Energy Association, FACT CHECK: WIND BORN IN U.S.A, DESPITE "OUTSOURCING" FLAP
Washington Post, Obama and Outsourcing: A Guide to the GOP Charges, July 12, 2012
National Renewable Energy Library, Preliminary Analysis of the Jobs and Economic Impacts of Renewable Energy Projects Supported by the 1603 Treasury Grant Program, April 2012,
Congressional Research Service, U.S. Wind Turbine Manufacturing: Federal Support for an Emerging Industry, September 23, 2011
U.S. International Trade Commission, Shifts in U.S. Wind Turbine Equipment Trade in 2010, June 2011
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