Yesterday, deep within the recesses of Congress, the U.S. House of Representatives Committee on Science, Space, and Technology -- Subcommittee on Oversight and Subcommittee on Energy held a hearing: Assessing the Efficiency and Effectiveness of Wind Energy Incentives. The hearing was scheduled on the heels of a recently released Government Accountability Office (GAO) report: Wind Energy: Additional Actions Could Help Ensure Effective Use of Federal Financial Support.
Before diving into the specifics about the Hearing and GAO report, let's look at the big-picture state of the wind industry in America. The facts show that wind is a good deal for the U.S. economy and helping us meet our environmental needs:
- Boosting the U.S. economy with up to $25 billion a year in private investment
- Employs over 75,000 Americans with manufacturing encompassing some 550 facilities spanning 44 states
- Helps consumers with billions of dollars in projected savings on their electric bills
- Responsible for avoiding over 4 percent of the annual carbon dioxide emissions of the U.S. electric power sector
- Wind is popular: 71 percent of Americans say they want more of it.
Witnesses at yesterday's hearing were with known front groups for the Koch brothers, among the world’s biggest coal and oil pipeline oligarchs; and who have mounted an ill-spirited campaign against wind energy for competitive and ideological reasons:
- Robert Michaels, professor of economics, Mihaylo College of Business and Economics, California State University, Fullerton, is a senior fellow at the Institute for Energy Research (IER) which is funded by Koch Industries money and led by former Koch Industries lobbyists.
- Audra Parker, president and CEO, Alliance to Protect Nantucket Sound, has taken funding from Bill Koch and other competing energy interests, as Koch himself confirms in his interview this month with CommonWealth magazine.
Unusual timing and targeting
The issuance of the Government Accountability Office (GAO) report was particularly unusual in singling out the wind industry, since numerous federal programs encourage all the various forms of energy. In fact most of the subsidies identified in the GAO report also support other forms of energy.
- Only 16 of the 82 programs tracked in the GAO report were solely for wind power. In fact, the majority of programs supported renewable energy or “other activities.”
- Of the 82 initiatives the report presents as “wind-only,” 41 also benefit fossil fuels or nuclear energy, or have an analogous initiative within the corresponding department or agency.
- As the report itself points out, the vast majority of the value to wind developers is in a single policy, the Production Tax Credit (PTC)--a policy that is threatened with expiration every year or two. That uncertainty has seriously hampered the industry's growth. In the past seven years, 2+2+2+1 does not equal 7 years of certainty.
More accurate and fair reviews on government support for energy resources already exist
A fair evaluation of our federal energy incentives requires a broad comparison, with historic context and in this context, wind incentives are just leveling the playing field. Comparisons and contexts can be found in both government reports and reliable independent sources.
- According to the Congressional Research Service, for more than half a century, federal energy tax policy focused almost exclusively on increasing domestic oil and gas reserves and production. There were no tax incentives promoting renewable energy or energy efficiency. During that period, two major tax preferences were established for oil and gas.
- Moreover, over the last 90 years, federal support for the fossil fuel industry has been far greater than for renewables. In fact, according to a study of historical incentives by the venture capital firm DBL Investors, the federal commitment to oil and gas was five times greater than for renewables during the first 15 years of each set of incentives. Government support totaling nearly $600 billion has been provided to bolster the production of conventional fossil energy sources, along with $73 billion for nuclear power, according to the Nuclear Energy Institute's own tally.
- Finally, according to a 2012 Congressional Budget Office report, only four major tax preferences are permanent - three for fossil fuels and one for nuclear energy.