We often blog in this space about the collision between environmental laws passed in the 1970s and the energy security requirements of the 21st century.  And advocates often point to energy efficiency as the “silver bullet” in both energy and climate policy, to wit, there are all sorts of measures available to individuals, corporations and governments that will enhance our energy security and reduce greenhouse gas emissions if only we can remove barriers to using them.

This morning’s Energy Daily (www.theenergydaily.com; subscription required) sheds some further light on this topic as it reports on the DOE Inspector General’s “dismal” assessment of $3.2 billion in energy efficiency block grants for states and municipalities that was included in the stimulus bill.  It turns out that while DOE has done a nice job of pushing the funding out the door — about $2.7 billion of the $3.2 billion was sent by formula to “more than 2,300 entities, including state energy offices located in 56 states and U.S. territories; 1,700 cities and counties, and 500 Indian tribes” and the rest ”directed to competitive grant awards and technical assistance activities” — less than 9% of the funds have actually been spent by grant recipients.

Not much stimulative effect there, but does it call into question the value of energy efficiency?  Probably not, as the real issue appears to be related to two facts:  First, as the piece points out, “many cash-strapped states and cities” have been ”hamstrung by hiring freezes that prevented them from staffing up to implement their block grant programs.”

And second, though you wouldn’t know it from this article, even energy efficiency projects must jump through a variety of environmental and other hoops before progress can be made.  The WaPo made that point in a piece on Saturday entitled “Big chunk of economic stimulus yet to be spent by state, local governments”(http://www.washingtonpost.com/wp-dyn/content/article/2010/08/13/AR2010081306058.html), noting that once cash-strapped state and local officials developed their plans, the ”plans then went to the Energy Department, which decided, among other things, whether projects needed a full environmental review.”  And some get bounced back:  “ The department told Florida that several of its proposals did not pass muster, and until recently the state was still unsure how to redeploy $12 million.”  Energy efficiency retrofit plans can run afoul of not only environmental requirements, but also well-intended historic preservation laws.

Just another reminder that energy policy, whether intended to be stimulative or not, is usually more complex than meets the eye.

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