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Subscribe to RSSOn the campaign trail in Colorado Thursday President Obama assailed Mitt Romney for opposing the tax break for wind energy production, saying the presumptive nominee would put tens of thousands of jobs at risk by letting them expire.
“At a moment when homegrown energy, renewable energy, is creating new jobs in states like Colorado and Iowa, my opponent wants to end tax credits for wind energy producers,” Obama said.
“Think about what that would mean for a community like Pueblo. The wind industry supports about 5,000 jobs across this state. Without those tax credits, 37,000 American jobs, including potentially hundreds of jobs right here, would be at risk.”
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Wind energy now supplies about 4 percent of U.S. electricity, up from 1.3 percent in 2008.
A spokesman for Romney's Iowa campaign said last week that Romney “will allow the wind credit to expire, end the stimulus boondoggles, and create a level playing field on which all sources of energy can compete on their merits."
Romney’s stance on the wind energy tax break puts him at odds with Republican senators such as Jerry Moran of Kansas and Chuck Grassley of Iowa. It was Grassley who pushed for the wind tax credit when it was created in 1992.
The Daily Rundown's Chuck Todd previews his interviews with various retiring Senators. Each touch upon some crucial issues that face their party and our country.
But Romney won applause from one GOP House member, Rep. Mike Pompeo of Kansas, who has proposed a bill to abolish all energy tax breaks. “The Solyndra scandal has demonstrated that taxpayers must no longer be forced to subsidize these industries,” Pompeo said last week. “When the government bets on these energy technologies, it typically selects the most unaffordable energy leading to unnecessarily higher energy prices for all Americans.”
Solyndra, a California solar-panel manufacturing firm that got a $535 million federal loan guarantee, filed for bankruptcy last year. Energy Secretary Steven Chu has acknowledged that the $535 million isn’t likely to be recovered.
Beyond the campaign rhetoric and the question of whether Romney’s anti-wind tax credit stance will hurt him in two wind-energy loving battleground states (Colorado and Iowa), there’s a serious economic debate here.
It hinges on the classic question: what activities and industries, if any, should the government require taxpayers to subsidize? Is it ever possible to have a “level playing field” so that consumers can choose the energy source that’s most cost effective?
And when Congress creates and preserves tax breaks for favored industries, does it also perpetuate the entrenched culture of lobbyists and special interests seeking favors from Congress?
In this case, every few years the wind energy industry and its lobbyists must urge Congress to give the tax break another lease on life before it expires. Lobbyist filings show that the American Wind Energy Association spent $1.1 million in the first half of this year on lobbying Congress.
Related: GOP wields report on Solyndra as cudgel against Obama
The group has hired lobbyists such as Juleanna Glover of the Ashcroft Group, former Louisiana Republican Rep. Jim McCrery of Capitol Counsel, and Elmendorf Ryan’s Steve Elmendorf, an aide to Dick Gephardt when he was House Democratic leader.
A pragmatist would say there’s nothing new here: the wind industry is just getting in on a subsidy game that other energy industries have played for decades.
As a Congressional Budget Office report noted in March, “Tax preferences for energy were first established in 1916, and until 2005 they were primarily intended to stimulate domestic production of oil and natural gas. Beginning in 2006, the cost of energy-related tax preferences grew substantially, and an increasing share was aimed at encouraging energy efficiency and energy produced from renewable sources, such as wind and the sun….”
That CBO report said energy-related tax breaks cost $20 billion in 2011 and 68 percent of them went to renewable energy, while only 15 percent went to fossil fuels.
Under current law, for a wind facility that starts operating by the end of this year, the owners can claim a 2.2 cent tax credit for each kilowatt hour of electricity produced. The tax credit is good for a 10-year period.
In a bill approved by the Senate Finance Committee last week, the wind production tax credit was extended through 2013 but it was also modified in a significant way, said energy industry consultant and blogger Geoffrey Styles.
The Finance Committee bill would make wind energy facilities eligible for the tax preference if the construction of such facilities or property begins before Jan. 1, 2014. “This will sweep in many more projects,” said Styles. “It has the effect of being much more than a one-year extension” since as long as a project gets started – not completed -- before Jan. 1, 2014, it would be eligible for the tax break.
According to the staff of the Joint Committee on Taxation, the proposal would cost $12 billion in lost revenue over ten years.
Energy economist William Pizer, who served as Deputy Assistant Secretary for Environment and Energy at the Treasury Department from 2008 to 2011 and now teaches at Duke University’s Sanford School of Public Policy, said the tax break is less than ideal energy policy for a variety of reasons.
One is the inefficiency of a subsidy compared to higher tax on more polluting energy sources such as coal and oil. And he said frequently some of the benefit of the tax-break flows to “tax equity partners” who are brought in to join with the actual wind energy project company.
And noting that the wind energy credit has expired three times since 1992 (with Congress ultimately reviving it each time), he said, “The boom-and-bust cycle has been problematic for the industry.”
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When analysts at the nonpartisan Tax Policy Center in Washington looked at the wind and other renewable energy tax breaks that were part of the 2009 stimulus bill, they said, “In general, these subsidies are less cost-effective than price increases” which Congress could impose through higher taxes on fuels such as coal.
The Tax Policy Center added that, “Such subsidies are very hard to remove once they have outlived their usefulness, since they develop powerful constituencies.”
In a blog post last week, Styles noted that during the 20 years in which the renewable energy production tax credit “has been escalating annually with inflation -- from 1.5¢ per kilowatt-hour (kWh) to the present level of 2.2 ¢/kWh -- the cost of wind turbines and (the cost of) their output has fallen significantly.” During that same period, wind energy capacity in the United States grew by 30 times.
So, Styles said, “in effect, we're subsidizing today's relatively mature onshore wind technology by a larger proportion than we did when it was in its infancy. That makes no sense, especially in the current environment.”
One factor which might call into question the competitiveness of wind energy in the marketplace is the new abundance of domestically produced natural gas in the United States.
But Ellen Carey, a spokeswoman for the American Wind Energy Association said, “One of the reasons the U.S. is able to enjoy this new abundant source of low priced natural gas was the multi-decade government support of the Section 29 production tax credit for unconventional gas. The production tax credit for wind energy ensures we build a diverse and stable portfolio of energy and do not over rely on a single energy source which exposes us to potential volatility.”
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This campaign has also avoided all mention of saving half the country from Global Warming and the resulting drought (and it is the half that grows most of the food).
Energy policy, as important as it is, pales in comparison with food. Just try doing without each and see.
Why as a country we're not going balls to the walls to implement renewable, sustainable green energy is mind-boggling, if not criminal.
Obviously, Big Oil, Big Banking, and Big Business with their grubby hands all over this.
Wouldn't those greedy bastards go into that business if it was viable to make some evil profits?
Monopoly is great for free enterprise, right?
I have studied wind energy as well as solar extensively. The only economic sense this makes is through government (taxpayer) subsidies, very large subsidies. Most of the costs are in the grid to get from the wind turbines to the market. Nuclear is currently unavaiable because of severe regulation but has unparalleled potential. So one has only to ask if you are willing to create yet another government bureacracy called the department of wind energy which becomes much like transportation, mail ervice, defense, etc... Eventually 70% tax rates coming. We need, need, need!
Then it's the oil monopoly with volatile prices and possible blackouts and a threat to national defense is what you want? I remember the Arab oil embargo and drill baby is stupid as the oil's boys won't drill, flood the market and lower profits.
But keep watching the consumers retreat from vacations and driving when the reality of high energy prices, high education costs, high healthcare costs hit home. It's coming and soon.
FOUR PERCENT OF US ELECTRICITY!!!
Fortunately, the Tax Code does not favor Oil , Gas & Coal.
(If you believe that last statement, sign up for the Koch Brothers-financed Tea Party. It needs smart people like that. I also want to sell you your very own undivided share, in a well-traveled Bridge.)
So, the Tea Party who wants no subsidies is sponsored by the people that get huge subsidies.
That is your stance?
Obama should be able to pick and choose who (HIS SUPPORTERS) gets your tax money ops thats the riches tax money sence 51% of americans pay no incometax at all. After all he is the KING right.
If it's such a great idea it wouldn't need any taxpayer financing. As soon as the subsidy ends it will suddenly be uneconomical to continue. Funny the way all these inefficient fixes fail to stand on thier own merit. As long as we continue to allow these nitwits in the government to keep using the funds extorted from the populace to fund thier buddies there is no hope for "change" or the country itself.
The country is changing. It is burning up.
But it is funny how the right-wingers don't mind extorting money from the populace to invade Arab countries. Displacing over a million people (and the death toll on civilians was way above 100,000) is not exactly "efficient", except under a Neocon definition, especially when the money could have been used to save your own country.
So you are saying that Big Oil would fail due to cutting their subsidies. They are raking in billions of profits and continue to receive taxpayer subsidies. If we cut them off, it will be uneconomical to continue with Big Oil. I think Big Oil has proven to be a viable, economic industry...so they don't need subsidies anymore.
David Noah,
In following your series of comments I have to conclude you are a youngster. If you are old enough to remember the oil embargo you would know that it happened in the 70's not the 80's.On top of that I believe some simplistic minds cannot grasp the concept of energy independence, which to succeed must include renewables. Did you not read that the oil industry has been subsidised since inception in the early 20th century. Where I come from hydro use to provide the majority of power. Today the same power company gets its energy from other sources usingthe dams only to control river levels. To me this is an absurd waste of resources. A further reminder; not every link on internet is true.
How much energy does it take to manufacture, deliver, and put into place just one windmill from hell, plus maintain it? That has to be a staggering amount of cash. They're an eye sore and a loud piece of over-engineering of a by gone era. Yes, they did create some jobs. That's true. But, how long will they last? You can't load up the countryside with these things. Or will they try? It's all about money and how much I can get before someone discovers it was a bad idea. Stay tuned for more.............
Like cars are not an eyesore? All congested and grinding to a halt on the interstate where commuters spend 4 hours a day breathing carbon monoxide and the future? More cars? lol
Ummmm, if 'wind energy" is so great & cost-effective why does it need subsidized? Also why did the most famous Democratic American family, the Kenedys, object to a wind farm that was to be located off the coast from Kenebunkport just because it would obstruct their lovely view while sailing?
Let's face it, this article is just another LAME attempt to kiss that liberal booty folks. Of course I'd expect no less from the MSNBC yellow journalism all-stars!
But seriously folks, can ANYBODY tell me how no HOPE and CHANGE from bad to worse equates to moving FORWARD? I'd REALLY love an answer... consult your Obama Magic 8-Ball if you must, libtards!
Why does oil need to be subsidized?
Well my understanding of oil subsidies, not that I necessarily agree with them, is without them oil/gas prices would be even higher then they already are or the refineries would sell it all to China because they're willing to pay more for it than we do. Why do you think oil companies are constantly among the largest campaign contributors to BOTH the Democrats & the Republicans? They ONLY care about corporate GREED & quite frankly just like to sh*t on both you & me.
So our President now supports special tax breaks for the rich. All hail the Chief!
Once the government tax credits expire you will hear the horror stories about how unrealistic and prohibitively expensive wind energy was.
I see gas at $350 a gallon. This summer I decided to not take a three week vacation to Colorado. Gas prices and general high costs run up by gas prices. My choice? Pay or stay at home. So, folks out Mid West, you lost thousands of dollars. I also cancelled our trip annually to the Jazz Fest in New Orleans, a week. Too expensive.
Now, if you keep talking up high gas prices and asking, where are the consumers. You now know.
Companies are no longer offering pensions so those spending better get to saving or their golden years will be lead years of misery. So, don't be fooled by consumers spending some now, it will come to a halt when that big health care bill comes or that college tuition is due for Buffy or Biff.
By the way I retired after 20 years in the military then retired after 20 years working for a major airlines. During my airline years I invested all my monthly military retirement. After retiring from the airlines I invested both monthly retirements. I have worked now after retiring twice for 8 years. With my 401 from my third job and all the other invested money I have over 2 million saved up and guess what I moving that all to accounts outside the US because what Obama is about to do. Get use to it people thats what people with money are about to do Obama has rwrecked this country. By the way Waddell and Reed are great Investment companies
I should think, patriot that you are and a millionaire to boot, you would be happy to pay a little more in taxes to help the country solve its problems. Guess not. Greed wins.
So, you are , were a gov beaurecrat? Big pension draining our tax dollars? If it was me you would have gotten three hots and a cot and no pension like the companies in private industry. So, be happy gov employee that you got a deal and raped the tax payer
Jamie
Why should A Vet give more of his hard earned money to the Gov't than he has to? If he can save HIS money by putting it overseas good for him.
BTW. Why didn't you mention Pelosi or Wasserman-Schultz in your statement? After all they have overseas accounts.
wallace
Since when is a Military man considered a gov bureaucrat? A Vet got his military pension by fulfilling his end of the contract he made with the US Gov't. He put his life on the line for 20 years and in return the US Gov't pays him a pension.
Meanwhile, outside the world of politics.
Check out the graph. The wind dies down during the hottest part of the day. That really helps out California.
http://wattsupwiththat.com/2012/08/09/wind-power-not-coming-through-for-california-power-alert-issued-by-the-caiso/
The one point most people seem to be missing here is that "green energy" isn't anywhere near ready for prime time! It's not reliable enough, nor is it capable of coming close to meeting the demand. If we triy to depend on wind or solar, we might as well shut down our factorys right now.
You will see a bunch of windmill grave yards as soon as the equipment becomes dated and is to expensive to repair.. Ugly, Ugly...
And we will never get to the point where it is viable with people like you saying no,no,no!
Your solution is more cars, more congestion? More pollution? You cant run forever to the pristine mountains to escape pollution.
in reply to sragan Where are the spent fuel rods? Where is all the soil around leaking pipe lines being dumped? Who is keeping all the natural gas pipe lines up to date? Wind farms are the safest way to supply electricity. Where is all the co2 going from coal fired generating plants?
There are 3 Windmills on Kodiak Island,AK. I was there 2 years ago. There was only 2 DAYS out of the 15 I was there that all 3 were working. The great majority of the time NONE were working. I was told that they cost abut 7 Million each. Seems to be pretty expensive for wind mills that do nothing.
Hmmm, Democrats wanna spend money we don't have and Republicans want a review of programs.
go to a wind farm and spend a little time...they are ruining our peaceful countryside and people who support them don't have them in their view
or go to West Virginia and see what coal does to the environment!!! Give me a break, they kill a few birds and make a noise...beats the heck out of fracking...unless you like flammable water!
Fracking causes earthquakes and the dirty water, they just dump so later the gov has to clean it up.
Sandy... go to school, get a job, make something of yourself.. You too can make a lot of money if you try.. Quite crying about everyone else.
Why do Republicans hate the environment and want to continue our reliance on foreign oil?
We want to drill here because it is much better for the earth to drill locally than to have to use millions of gallons of fuel to ship it here.
I am very much an environmentally concerned person. I fish and dive the reefs, fish the Everglades and backcountry and have a cabin on the Peace River.
Ban plastic bags and put NASCAR with the NCAA for an electric car series, I do not want my money thrown at crap is one reason I am a Republican.
$
Greed and stupidity
Jobs won and lost. That is the defining issue.
Maybe if we could harness all the hot air around our plolitians, now that would be an energy ploicy!
If there was EVER a program that deserved a New Deal style level of support, it's BATTERY technology. The limiting factor of every environmentally neutral energy source is the storage issue; whether we're talking wind, sun, algae or others. The outlay is too much (apparently) for the corporate world who is making too much money NOT making anything to put their necks out on the line for something that clearly is the next wave; as a result, the US should be all over this so we can regain our global dominance...then again, this is what I said in 2008 when Obama got elected, and he was too busy not pissing anybody off that he did nothing, except for the pittance he gave to Solyndra (yes, $500 M IS a pittance) and, yes, they tanked, but so do many scientific ventures (how many NASA rockets blew up before we made it work?) - that doesn't mean you give up on science and start praying as your solution, or pretending there isn't a problem, which seems to be the preferred approaches of the Republican Party.
My conservative solution:
Combine NASCAR with the NCAA for an electric car series. If it is viable, they would find out real quick.
You are right. The technology is so difficult, the costs of development so high, that no private company is going invest the capital that would be necessary. Only government subsidies can move the technologies forward. We have had numerous examples of that kind of government involvement in the past leading to very successful programs that private enterprise can then take over and make money on. Aerospace is an obvious example. Medical research another. And there are lots more. Republicans in the past supported such efforts, but now that the prime directive is to defeat Obama, they have to oppose everything he supports.
Jamie, you are wrong.
These industries have been heavily subsidized and failed despite the free money.
@ van man
"....except for the pittance he gave to Solyndra (yes, $500 M IS a pittance) and, yes, they tanked, but so do many scientific ventures"
Solyndra didn't tank because their products didn't work....they tanked because the maunfacturing process and the materials needed to produce the solar panels is still too expensive.
http://www.quora.com/Solyndra/Why-did-Solyndra-fail
excuse I meat politicians
There was a study about a year ago that noticed that the ground under the wind turbines was a little hotter than the surrounding ground. What does it mean? They didn't know but they just thought it interesting.
That is caused by the magnet field created.
Romney wants it to expire so his big oil buddies can continue to hold us hostage. With wind their is no chance of an oil spill. With wind industry there will have to be inferstructer to carry it (more jobs) CAN'T BE OUTSOURCED OVERSEAS. The keystone pipe line uses Chinese steel for the pipes, and runs a big risk of spills.
Wind is currently highly subsidized, who is holding them back?
Has it ever occured to you that Romney's "Rich Buddies" could play in the wind game if they wanted to? Think about it...........