Why Won't Congress Just Extend Renewable Energy Tax Credits for 10 Years, Already?
photo: slimmer_jimmer via flickr
I've written a number of times on how tax credits for renewable energy development in the United States have been stalled in the Senate for a while, and without these a number of large renewable energy projects' futures are in question—the Pickens Plan, as well as 800 megawatts of solar power contracted by PG&E; are both contingent on the renewal of these incentives. Well, a new piece in Yale Environment 360 by Denis Hayes (president of the Bullitt Foundation, among other things...) does a good job of detailing what sort of political shenanigans have gotten us to this point and why the current impasse needs to be cleared.
Industry Stalls Without Stable Policy
According to the American Wind Energy Association, when the credits were allowed to lapse in the past (most recently in 1999, 2001, and 2003), investments in wind projects fell by 70 percent to 93 percent. That is no way to build an industry.
An independent study by Navigant Consulting found that "112,000 jobs in the wind and solar industries (78,000 wind, 34,000 solar) and $19 billion in investment" are at risk if the renewable energy tax credits are allowed to expire at the end of the year.
Filibuster Not Broken Eight Times
The House of Representatives (which does not have a filibuster) has passed an extension of the renewable tax credits, but in a form that Republicans in the Senate (which does have a filibuster) don't like. The measure has come before the Senate eight times but could never command the 60 votes needed to end a filibuster. John McCain didn't vote for the measure on any of those eight occasions, even when he was nearby during the vote, sitting in his Senate office. (Barack Obama managed to vote for the legislation three times, although, like McCain, he was pretty busy.)
High Gas Prices Push Pressure-Cooker Legislation
Hayes describes these next two as "pressure-cooker legislation", the type which everyone will look back on with embarrassment:
In the House of Representatives, 11 Republicans and 11 Democrats (joined now by 97 additional representatives) have introduced the "National Conservation, Environment and Energy Independence Act." This little gem removes many of the most crucial federal restrictions on oil drilling on the Outer Continental Shelf. It taps the Strategic Petroleum Reserve (in the apparent belief that gasoline prices that discourage SUVs constitute a state of emergency). It ends the moratorium on oil-shale leasing, rekindling wars with ranchers and water users in the West. Almost as an afterthought, it extends the renewable energy tax credits for six years.
This is the one which caused some to accuse Barack Obama of switching his position on offshore oil drilling:
In the Senate, a bipartisan "gang of 10" conservatives has proposed a New Energy Reform Act (with the catchy though misleading acronym New ERA). The measure includes a couple of McCain's pillars: offshore leasing off some East Coast and Gulf states, with a requirement (in violation of World Trade Organization rules) that all the oil remain in the United States, as well as providing accelerated depreciation for new nuclear plants. It also includes one of Obama's goals — large subsidies to Detroit for a new generation of post-petroleum automobiles. The measure's backers hope to buy some coal-state votes with grants for coal-to-liquid plants with "carbon-capture capability." And, as a sweetener for those favoring a sane energy future and a measure that actually accomplishes something, it contains a five-year extension of tax credits for efficiency and renewables, paid for in part by royalties from the new oil drilling.
Incentives Will Ultimately Be Extended
Hayes believes that even if they don't get extended this year, the incentive package will be passed in the next administration. However failure to do so now is already causing disruptions to the financing of some projects (though he doesn't cite specifics) and if compromise over limited offshore drilling is required to pass a short-term tax credit extension is required, then so be it. That said, any compromise over increasing funding for coal-to-liquids, or expanded oil shale leasing should be rejected. He goes on to say:
In any sane world, our Congress would be able to simply extend for 10 years the existing tax credits for energy sources that produce no greenhouse gases, no bomb-grade materials, no toxic wastes, no negative balance of trade. But the last year has shown sanity to be impossible in our dueling democracy. So Congress should accept the bipartisan wisdom of Sens. Maria Cantwell and John Ensign and pass a one-year extension of all the tax credits for efficiency and renewables and then sort out the long-term policy after the election. If there needs to be some additional drilling, ideally in the Gulf Coast, in order to make this deal fly, we greens should grit our teeth and accept it.
This matters because most of the industrial world has been grappling with global warming for the last decade while the largest emitter of greenhouse gases has worked to sabotage their efforts. There is genuine grassroots anger at the United States throughout much of the world, and each additional indication that this is a trivial matter for us stokes that anger.
via :: Yale Environment 360
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