When FPL Energy broke ground on a 267-turbine wind farm in northeastern Colorado’s Logan County in May 2007, State Representative Jerry Sonnenberg noted an emerging transformation in the high plains county’s economy.
“No longer do we just raise corn and wheat, sunflowers and cattle,” he said. “Now we’re farming energy.”
Logan County, home to 21,000 people spread across 1,839 square miles, is a vivid demonstration of the economic development potential that clean, renewable energy holds for the United States’ rural areas, many of them rich in renewable energy resources but disadvantaged in other ways. Projects to generate energy from wind, solar, geothermal, and biomass can invigorate rural economies by generating good-paying jobs that support families, pumping needed new revenues into local government coffers, providing a reliable supplementary income for farmers and ranchers, and stemming the migration of young people seeking better economic opportunities elsewhere.
Rural areas have the resources and available open land for clean-energy development, and wind, sun, and biofuels are most abundant in some of the least populated parts of the country. By one estimate, for example, North Dakota has enough wind energy potential to supply a fourth of the total U.S. demand for electricity. And 2,500 square miles of Nevada could meet 100 percent of our electric power need.
Logan County is blessed with abundant wind and has emerged as a clean-energy leader in the Rocky Mountain West. Today, some 400 wind turbines in the county are producing enough electricity for more than 172,000 homes, and another 350 turbines are planned and permitted. A new 70-mile 230 kilovolt transmission line carries that locally produced power to the grid. The county government has received more than $6.5 million in use taxes and building permit fees, and will get nearly $90 million in additional property taxes over 30 years.
In that same period, farmers, ranchers, and other landowners will receive about $78 million in lease payments for having towers on their land, which breaks down to $4,000 to $5,000 per turbine. Constructing the county’s four wind farms put several hundred construction laborers to work, and when all the permitted turbines are in operation, more than 100 full-time workers will maintain and operate them. Northeastern Junior College in nearby Sterling, CO, has just started a wind technician program that will put students on a path to well-paid jobs in the clean energy economy
The surge in economic activity in Logan County has helped the region weather the national recession and laid the foundation for a more diversified, vibrant economy that will pay dividends for decades, says Rich O’Connell, executive director of the Logan County Economic Development Corporation. “We really think that this is the beginning of a major change in the way energy is generated in our country,” he says. “We could see wind development going on here for many years into the future.”
Farm state lawmakers have often expressed concerns about climate legislation’s impact on rural America in congressional debates this year, worrying that the legislation will burden already strapped farmers with higher energy costs. In early August, for example, Arkansas Senator Blanche Lincoln—who was recently tapped to serve as chairman of the Senate Agriculture Committee—said the House-passed American Clean Energy and Security Act, or ACES, “places a disproportionate share of the economic burden of families and businesses in rural America.”
But Agriculture Secretary Tom Vilsack stepped up with a compelling rebuttal this summer as he toured farm states in support of ACES, which along with establishing a cap-and-trade system to cut carbon emissions and providing robust funding for energy efficiency will require utilities to meet 20 percent of their electricity load through renewable energy sources or energy efficiency measures by 2020.
Vilsack claimed in a July column published in the Des Moines Register that, “When we address climate change, we will not only fend off a looming climate crisis, but we will revitalize rural America.”
And he extolled the benefits of clean energy again in a conference call with farm broadcasters in late August:
“This is the first time I’ve seen the opportunity created for rural America to actually benefit from potential manufacturing opportunities and job growth because the solar panels and the windmills are most likely going to be constructed, maintained, and installed in rural areas.”
Vilsack’s prediction that rural America will benefit from the coming transition to a low-carbon energy economy is backed by several studies. “Large utility-scale wind projects provide new jobs nationwide, but especially in rural communities where there is a need for job retention and diversification,” concludes a 2008 study by the National Renewable Energy Laboratory, or NREL. “Wind power projects generate tax revenues that are used to improve schools and other public services, which in turn improve the quality of life in rural areas. Local landowners also receive extra income in the form of land lease payments from wind turbines located on their land. New wind power installations also offer other benefits, such as use tax generation, sales tax generation, transmission line impacts, water savings, price stability, and environmental benefits.”
NREL used its Jobs and Economic Development Impact, or JEDI, model to look specifically at the benefits accruing to Colorado from the installation of the state’s first 1,000 megawatts of wind energy, which generate enough electricity to power nearly a quarter million homes. The benefits include:
- 300 permanent jobs in rural Colorado, with a total yearly payroll of $14 million, and the equivalent of 1,700 full-time jobs during construction, with a payroll of more than $70 million
- $2.5 million in annual income for farmers and ranchers
- $4 million in yearly property taxes
- $35 million in annual local economic activity
A Natural Resources Defense Council study of renewable power potential in Missouri found that “the emergence of a large domestic wind power industry would be a boon to the economy of many parts of rural Missouri, and it would also mean a huge new market for domestic manufacturers of the components that go into wind turbines, towers, and other renewable facilities.” Using the NREL’s JEDI model, the study found that a 100-megawatt wind project in Missouri would generate 5,745 jobs and $62.6 million in economic activity during the construction phase, and 22 full-time jobs, $575,000 in property taxes, and $3 million in economic activity during operations.
Nationally, NREL estimated in a 2008 study that generating 20 percent of the nation’s electric needs from wind by the year 2030 “will lead to enormous benefits to rural landowners and towns, the manufacturing sector, and infrastructure across America.” Achieving that goal would generate nearly $1 trillion in economic activity, employ nearly 250,000 workers per year, would provide local communities with some $1.9 billion in additional property taxes and landowners with about $783 million in lease payments. (The study did not assess how much a 20 percent wind program would displace jobs and economic activity in other sectors.)
Rural areas can see even greater economic benefits when states have policies that emphasize local ownership of wind power projects and local manufacturing of components, according to another NREL study of wind energy and economic development in Nebraska. Under the state’s Community-Based Energy Development policy, Nebraska would see more than an 80-percent increase in state jobs created and 77 percent greater yearly economic activity under a 20-percent wind energy scenario.
The U.S. wind industry has been rapidly growing in recent years despite the fact that overall capacity remains relatively low. According to the Department of Energy’s Wind Technologies Market Report, as of 2008 the United States had enough installed wind energy capacity to supply almost 2 percent of total energy consumption. But wind represented 42 percent of all new generating capacity added in 2008, and for the fourth straight year it was the second largest new resource behind natural gas. Cumulative U.S. wind capacity in 2008 stood at more than 25,000 megawatts, the largest in the world. The American Wind Energy Association estimates the wind industry added 35,000 jobs in 2008, with total employment at 85,000.
The recession has slowed the growth in the wind industry, but clean-energy funding in the American Recovery and Reinvestment Act has provided needed help. On September 22, for example, the Department of Energy announced the second round of grants under the renewable energy part of the recovery program—a total of $550 million that included $464 million for five wind projects. Total funding on the renewable energy program has totaled more than $1 billion.
Wind power can also create more jobs than traditional energy sources. On an energy equivalent basis wind projects can deliver more economic benefits than fossil fuel power plants, according to a 2006 paper prepared by NREL researchers that modeled wind, natural gas, and coal projects in Colorado, Michigan, and Virginia. For example, the study found that in Colorado, a wind power project would create nearly 90 percent more jobs during the construction phase as a coal plant, and more than twice as many jobs during the operations phase.
Similarly, a June 2009 study by the Political Economy Research Institute and the Center for American Progress reported that “Spending on clean energy will create a higher net source of job creation in the United States relative to spending the same amount of money on high carbon fuels…” Specifically, the study found that $1 million produces 4.9 direct and indirect jobs if spent on coal and 3.7 jobs if spent on oil and natural gas. The same amount spent on wind, solar, and biomass yields 9.5, 9.8, and 12.4 jobs, respectively.
When the House of Representatives narrowly approved ACES in late June, much of the opposition came from lawmakers representing rural areas. As the Senate prepares to take up comprehensive energy and climate change legislation this fall, lawmakers need to take a more rigorous look at the benefits for rural America. If they do, they’ll reach the same conclusion that the New Rules Project did in a 2008 report: “Harnessing renewable energy can dramatically improve the economic prospects of many rural areas.”
Tom Kenworthy is a senior fellow at the Center for American Progress.