Will renewable energy power Nevada’s economy?
If the casino industry continues its decline, Nevada may need a new economic engine
Run a search on Google for the phrase when the recession is over and you get 22,600 hits. Search for after the recession and a whopping 1,090,000 hits come up. All over the nation government and business are planning for better times, some optimistically, others cautiously.
For example, “In addition, he said, a no pay-hike policy would make it difficult to recruit good people for the few jobs being filled, and it might spawn a mass exodus of remaining employees after the recession ends if prospects for better jobs develop elsewhere,” is a line that appeared in a December Sunbelt Media story on its Nevada Money Matters site.
But what if some sectors of the economy don’t make it all the way back? Everyone knows what’s happening to newspapers, for instance. Closer to sagebrush country, the question is, “What if the casino industry doesn’t recover?”
It’s not a far-fetched scenario, particularly in the north. Some casinos are known to chart the monthly loss to California tribal casinos they are experiencing. Once tourist patterns are broken, there is no guarantee they will be reestablished when times are good again, particularly as out of state casinos become larger and more elaborate and thus competitive with Nevada megaresorts.
Nevada has reinvented itself economically before. Is it ready to do so again?
When the Comstock mines dwindled out, neither the business community nor the state government had much of a strategy for replacing mining. The state drifted until it revived with the 20th century mining booms in Goldfield/Tonopah and Eastern Nevada. During the long post-Comstock depression in Nevada, the state sometimes reacted to opportunities—such as quickly legalizing prizefighting when it got a chance to host the heavyweight championship fight in 1897—but no one was grabbing the web whole. Reno dabbled for a time with portraying itself as a health resort, and the state kind of stumbled into being a quickie divorce center.
After the decline of the second big boom in Nevada mining and with the onset of the Great Depression, the Nevada Legislature made gambling legal and made quickie divorces even quicker.
The Nevada divorce industry lasted until the 1970s. As other states in the late ’60s began making their divorce laws less punitive, it became easier to get home-state divorces.
But the gambling industry kept rolling along. Even competition from Atlantic City and then other states did not initially slow Nevada’s casino growth. But California tribal gambling is another matter.
The 2009 Nevada Legislature enacted a series of measures to try to turn the state into a center of renewable energy.
These included measures that
• require NV Energy [Sierra Pacific] to plan for transmission lines to carry energy from areas in the state where renewable energy facilities are likely to be located;
• create a renewable energy fund as well as energy efficiency and energy conservation loans (The money is expected to come from federal stimulus legislation);
• add two small county members to the state Economic Development Commission in recognition of the small counties locations renewable projects are expected to have;
• create abatements of portions of sales and property taxes for wholesale power producers using renewable sources;
• create a new Renewable Energy and Energy Efficiency Authority and a post of Nevada energy commissioner.
This initiative is being treated as a major effort. One Las Vegas newsroom, for instance, reported, “With help from the 2009 Legislature, Nevada has become one of the most attractive states in the sun-drenched West for large solar plant development and other alternative energy projects.”
That’s an exaggeration. Critics say there is less to this package than meets the eye. Nevada is more competitive than it was, but the strictures on state budgets and other political problems meant that some incentives did not see the light of day.
Rose McKinney James, a Las Vegas energy consultant, said the legislature was too big-project oriented.
“I think we made some progress. I think we made more progress on large scale power projects and less progress on small-scale, site-based applications.”
The small-scale applications she’s talking about are things like installation of renewable applications on individual homes. These not only encourage small businesses, but they generate a need for a whole trail of such businesses, creating jobs all along the way.
“With these projects, you have to install, you have to be trained for the installation, the components have to be distributed—you end up with a lot of businesses doing different things. … There has to be a balance. You don’t cherry pick and just go after the low hanging fruit [large projects].
“I think that had we been able to do more for small-scale solar, we might be in an even better position to create jobs and sustain jobs.”
But even if everything comes to pass as state leaders hope, is energy development likely to be Nevada’s next economic engine? In the 1980s, Nevada got the notion that it could be “the next Silicon Valley.”
In 1985, the Nevada Legislature approved a second engineering school, at UNLV, to make the state more competitive for high-tech firms. But the notion of Nevada as a Mecca for high-tech lost credibility when only a few such firms opened in Nevada. One economist noted that there’s a reason that Silicon Valley is in the Santa Clara Valley. It is in direct proximity to world class educational institutions—Stanford, Santa Clara University, Carnegie Mellon Silicon Valley, San José State University—as well as important federal facilities like NASA Ames Research Center, and it is a locus for engineers and venture capitalists. Nevada, with its uncertain state budget commitment to education, was in no position to compete. Moreover, other states were also mounting their own efforts to become the next Silicon Valley.
Today, every sun-drenched state is trying to become a center of renewable energy. In the 2009 Utah Legislature, for instance, an energy package was enacted that one green energy group called “a strong message that Utah is open for business.”
Does Nevada have any reason to believe it is any better situated to compete than other states? Former Nevada governor and U.S. Sen. Richard Bryan said it does, and he cited two reasons—the plethora of non-private land and the state’s connections in Washington, D.C.
“I think we are competitive,” he said. “Not everyplace has the amount of public land we do—86 percent of Nevada is public land so you don’t have to deal with the private sector condemnation issue and matters like that, so I do think renewables are a possibility.”
If dealing with private landowners is a problem, is dealing with the federal government any better?
“I think the answer is yes,” Bryan said. “I’ve always found the BLM [U.S. Bureau of Land Management] to be pretty reasonable.”
In addition, he said, the former longtime director of the Nevada office of the BLM, Bob Abbey, has been nominated by President Obama to be its national director.
“He knows Nevada well and would be particularly effective at working with the various interest groups and making it come out right,” Bryan said. (Sen. John McCain said last week that he will oppose Abbey’s nomination unless Obama comes through with a promised position on McCain’s bill allowing an Arizona copper mine in a national forest. McCain did not say whether he would place a senatorial “hold” on the Abbey nomination, which could stop the nomination cold.)
Then there’s the Senate majority leader, Harry Reid, who would also grease the skids for state energy projects.
Bryan says one of the things that could handicap development of energy in Nevada is local concerns—many of them legitimate—that could slow projects.
“People will say, we’re 100 percent for renewable energy, but we don’t want a wind farm here, or we don’t want the solar panels here, or the towers are too tall.”
That, however, is a problem that any state will face.
One straw in the wind: The U.S. Bureau of Land Management on Tuesday this week opened the comment period for an environmental impact statement on the proposed Solar Millennium project planned for the Amargosa Valley south of Highway 95 in Nye County.