Our headline has the virtue of being true—as we will explain—unlike Google executive chairman Eric Schmidt’s assertion this week that people who oppose government subsidies for green energy are liars. The real charlatans are businesses like Google that use climate change as a pretext for corporate welfare.
Google, whose motto is “Don’t Be Evil,” announced on Monday that it is quitting the American Legislative Exchange Council (ALEC) because of the conservative outfit’s putative denial of climate change. “Everyone understands climate change is occurring,” said Mr. Schmidt. “And the people who oppose it are really hurting our children and our grandchildren and making the world a much worse place. And so we should not be aligned with such people—they’re just, they’re just literally lying.”
In fact, ALEC takes no position on the substance of climate change. ALEC provides a forum for sundry businesses to discuss free-market reforms with state lawmakers. Two of its policy targets are renewable-energy mandates and subsidies, which are being exploited by big businesses like Google at the expense of low- and middle-income taxpayers. Google’s real problem with ALEC is a conflict of pecuniary interests.
Consider Google’s pledge to fund over $1.5 billion in non fossil-fuel energy. Yet Google derives most of its energy from non-renewables on the grid because it says that “while our data centers operate 24/7, most renewable energy sources don’t.” Data centers consume a lot of power, and renewables can cost three times as much as fossil fuels. It’s no coincidence that Google’s server in Iowa is located near one of the cheapest sources of coal-fired power in the Midwest.
Also not a coincidence is that nearly all of Google’s solar and wind farms are located in states with renewable-energy mandates, which create opportunities for politically mediated profit-making. For instance, California requires that renewables make up a third of electricity by 2020. Google has invested about $600 million in California’s solar plants such as the Ivanpah system in California’s Mojave Desert. Ivanpah is the world’s largest solar-thermal project, which is the target of environmentalists.
Dozens of federally protected desert tortoises have been displaced or killed. The Center for Biological Diversity estimates that Ivanpah’s “power towers”—which burn natural gas—incinerate about 28,000 birds annually. The death toll is disputed by others, but Google has made taxpayers complicit in its avian-cide. The $2.2 billion bird fryer was funded with a $1.6 billion federal loan, which Google and its business partners plan to repay by applying for a federal grant.
The do-no-evil company has invested $157 million in a wind farm in California’s Tehachapi Mountains, which has killed thousands of birds including federally protected golden eagles. Google’s renewable portfolio includes a $275 million investment in two wind farms in Texas that are partly responsible for the construction of $7 billion in new transmission lines. The Texas Public Utility Commission estimates the lines will cost ratepayers on average $72 per year. Google has about $60 billion in cash and short-term investments sitting on its balance sheet.
Most of Google’s renewable investments qualify for a federal investment tax credit that covers 30% of the cost. Its $450 million investment in rooftop solar-systems also benefits from state incentives such as “net-metering” laws. This hidden subsidy compensates ratepayers for power they remit to the grid at the retail rate, which can be three times as much as the wholesale price of electricity. Net-metering allows solar companies to charge higher rates to homeowners who lease their panels, and thus for investors like Google to reap larger profits.
ALEC as well as the right-wing radicals at the Natural Resources Defense Council and National Black Caucus of State Legislators have encouraged states to ensure that all ratepayers under net metering pay their share for maintaining the grid.
The point is that Google behaves like all other self-interested businesses—which also means that it bends to the political winds. Unions and progressive groups have been bullying corporations for years to abandon ALEC so the left has less political and intellectual opposition in the 50 state capitals. Earlier this month they wrote to Google denouncing ALEC’s “extreme views,” which “include denying climate change.”
Perhaps Google figured it could gain political benefit by joining the liberal smear campaign against ALEC. But Mr. Schmidt shouldn’t disguise his company’s mercenary motives behind false and trendy appeals to green political virtue.
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