“Eureka: I have found it!” As Washington looks to create what Vice President Joe Biden calls “the economy of the future” and President Barack Obama to “transform the way we use energy” they’re turning toward California. Eureka--we’ve found gold. Except it’s solar, wind, geothermal, and energy efficiency. The state has long been a leader in energy efficiency, renewable energy, utility regulation, and environmental policy. This leadership, in turn, has made the state a hotbed of green business activity. Like Sutter’s Mill in 1848, California stands at the forefront of a new gold rush as Washington gets serious about a greener future. First, because of its green policies and green industry, the state is poised to garner a lot of money from the economic stimulus bill for clean energy. That’s just the prelude. California is positioned in the long-term to reap economic dividends as Washington D.C. moves to create a smart grid, enhance energy efficiency, and transition toward renewable energy at the national level. That’s because California is ready to supply many of the technologies, software programs, and services the nation will need to create the new green economy. It’s no surprise then, that as they seek to spend $50 billion worth of clean energy money under the federal economic stimulus bill, plus enact legislation for a nationwide renewable energy standard and enhanced energy efficiency, Washington officials are calling California a lot these days. State officials and businesses are eager to hear from Washington. “The state and Air Resources Board is being called on for advice in a number of these areas,” noted Air Board chair Mary Nichols. She urged her colleagues to take advantage of such calls and to volunteer to speak in Washington. After the phone calls and meetings, many expect federal dollars to soon follow. “It’s a big deal,” said Gordon Ho, Cooley, Godward, Kronish partner, who advises Silicon Valley green businesses. “The sheer dollars are ten or 20 times more than what was available before.” Ho said the long list of federal financing programs and tax incentives in the economic stimulus bill would help a lot of California firms that have “great technologies,” but have been stymied in the market due to the financial crisis. “The money now will enable projects to continue on that are stalled at this point,” he said. Statewide, venture capital investment for green technologies grew from $1.5 billion in 2007 to $3.3 billion last year. That amounted to 57 percent of all green venture capital investment nationwide, according to a report released last month by Next 10, a Palo Alto-based think tank. Since 2005, green jobs have increased in California by 10 percent, compared to an anemic one percent rise in the number of jobs statewide across the board, the report noted. In another sign the state stands head and shoulders above others in the emerging green economy, California leads in green technology development. State inventors registered 70 percent of the nation’s patents in the field between 2002 and 2007, according to the Next 10 report. Not surprisingly, with its concentration of scientists, engineers, and computer programmers, Silicon Valley is the center for a good portion of the state’s emerging green energy economy, according to Joint Venture: Silicon Valley Network. A February 17 network report shows that the number of green enterprises in the valley has increased 29 percent since 1996. Companies are developing an array of new products and services for generating electricity and managing energy on the grid and in buildings. These technologies represent new configurations and applications of existing technologies in many cases aimed at improving the efficiency of energy flows and usage. Valley companies also are involved deeply in developing new materials that more effectively harness solar energy and store and use energy both on the grid and in vehicles. Biotechnology firms are involved in developing advanced biofuels. All told, the valley has 700 companies that employ 10,000 workers active in the green business sector, according to the network report. Not only will developments in Washington provide new leverage for these companies, but jump start stalled green generation projects through loan guarantees, grants, and tax incentives for producing wind, solar, and other types of renewable energy. The economic stimulus bill will bolster state programs that employ energy efficiency and solar installers. For starters, the California Energy Commission announced March 3 that it expects to receive $300 million from the federal economic stimulus bill for its State Energy Program and Energy Efficiency and Conservation Block Grant Programs. Those funds support conservation, energy efficiency, and renewable energy in California, including solar and building energy efficiency auditors and installers. Universities with energy research programs, like Stanford and University of California at Berkeley, stand ready to obtain additional federal money under the economic stimulus bill. At the same time, Obama’s proposed budget, if passed, will begin to whittle away federal subsidies for traditional fossil fuels. For instance, it would impose excise taxes on offshore oil and gas production in the Gulf of Mexico. If ultimately enacted, this will help level the playing field between the old and new energy technologies. Someday, the white Halliburton pickup trucks that comb the wind swept plains of the West to service oil and gas drilling operations are likely to be replaced by hybrid and electric powered trucks from California carrying crews to mine the wells of energy efficiency, smart grid systems, wind, and solar rays. When that happens, energy money will flow here rather than to Texas. Sweet revenge. It’s still a tenuous vision, particularly during this economic downturn. Peering past the gloom, however, a new California gold rush in green technology promises to become a tangible reality.
