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Obama looks to Mich. to revive clean energy debate

Thu, 01/26/2012 - 12:13pm
JEFF KAROUB - AP Business Writer - Associated Press

A Michigan factory that made luxury yachts before the recession and diversified to add wind energy products when times got tough was touted by President Barack Obama at his State of the Union Address as an example of an industry creating forward-thinking jobs — with a little help from the government.

In urging Congress to approve clean energy tax credits, Obama cited Energetx Composites LLC, a wind turbine blade manufacturer in Holland, Mich., that received millions in government assistance. Invited to sit in the first lady's box during the speech Tuesday night was Bryan Ritterby, 58, who went to work for Energetx after being laid off from his furniture-making jobs three years ago.

"Some technologies don't pan out; some companies fail," Obama said. "But I will not walk away from the promise of clean energy. I will not walk away from workers like Bryan."

Without mentioning it by name, Obama appeared to be defending his administration's support of Solyndra LLC, the California solar panel maker that received a $528 million government loan but filed for bankruptcy court protection last year. Energetx is in a somewhat different situation than Solyndra but still must fend off skepticism from critics who contend government-assisted clean energy products often don't produce enough high-wage jobs to make it worth the money.

"They must have had to look pretty hard to find someone working in alternative energy," said Donald Grimes, a senior research specialist at University of Michigan. "I think the politics is what's driving almost this delusion of where the jobs are. If you want to tout the future of where green energy jobs are going, it's going to be garbage collection."

Indeed, waste management and treatment is among the categories with the most "clean economy" jobs in the United States, according to a 2011 report by the Metropolitan Policy Program of the Brookings Institution, a Washington, D.C.-based nonprofit think tank. The category represented about 385,000 jobs in 2010; the wind industry employed 24,294 the same year, the report said.

In 2009, a state board announced a $27.3 million tax credit over 15 years to encourage Energetx to expand. The money is tied to the creation of about 1,000 jobs at the company, and won't be awarded in cases where jobs don't materialize. It also got a $3.5 million state award for "energy excellence" in 2010, which was expected to be matched by the U.S. Department of Energy.

The company is far short of its ultimate job target now — with fewer than 50 employees currently making the turbine blades and other projects — but it expects to hire roughly 100 more this year, mostly in composite manufacturing. The company would not release specific wage ranges, but human resources director Steven Busch said pay will be competitive with similar manufacturing jobs in the Midwest.

U.S. Rep. Bill Huizenga, a Republican whose district includes Holland, said he doesn't "see a Solyndra-type situation" with Energetx or other clean energy companies in southwest Michigan, such as those that produce batteries for alternative-fuel vehicles. Combined, the area around Holland has about 7.5 percent of its workforce employed in the broad category of "clean jobs," compared with the national average of 2 percent.

"This isn't our preferred route, but if this is the route that's presented to us, we're going to take it and make it as successful as we can make," Huizenga said. "Ultimately, the business principles have to be sound. Whether it's wind, solar, nuclear ... these industries aren't going to just be able to depend on government subsidies forever. At some point you've got to be able to stand on your own two feet."

While Michigan remains stung by the decline in the auto industry, some officials see this new technology as an area where it can lead again.

"It's communicating a message to people: This is a place on the cutting-edge of change and solving problems," said John C. Austin, a Brookings senior fellow and visiting faculty member at University of Michigan. "That's been our big problem in Michigan. We fought for years protecting the auto industry from change. Now we can be the leader in increasing the production of electric cars."

Brookings officials acknowledge the alternative industry is hard to assess since such jobs pervade all parts of the economy, but its study last year aimed to provide a comprehensive, detailed snapshot of what the sector truly represents.

Erik Nordman, an assistant professor of renewable energy and lead investigator of the West Michigan Wind Assessment project, says the Energetx's transition isn't as far-fetched as it might seem because the keel of a yacht closely resembles the blade of a turbine.

With wind energy seemingly more marketable in the future, West Michigan economic developers envision a time Energetx will expand and have hundreds of workers.

"This is new product entry," said Rick Chapla of The Right Place, a western Michigan economic development organization. "This is complex manufacturing. This is not something that has been done or will be done overnight. It won't be done in one year. It will be done over a period of years."

It's fertile political ground for Obama too. Not only is Michigan considered a swing state in the November election, but he has made several trips to the area to tout clean energy projects, and his administration has provided $2.4 billion in federal grants to develop next-generation electric vehicles and batteries.

Grimes remains skeptical. He says it's appropriate for the government to invest in research, but not in fledgling commercial enterprises. He cites Solyndra as an example but argues even "picking winners" can prove problematic, since "creative destruction" is a common byproduct of successful yet disruptive technologies.

"They don't do well with innovation because it costs people jobs," Grimes said.

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Associated Press writer Tim Martin contributed to this report.

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Follow Jeff Karoub on Twitter: http://twitter.com/jeffkaroub

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