All Those Billions, Blowing in the Wind
On February 1, an urgent alert was sent to supporters of wind energy. It stated: “The PTC is the primary policy tool to promote wind energy development and manufacturing in the United States. While it is set to expire at the end of 2012 … the credit has already effectively expired. Congress has a choice to make: extend the PTC this month and keep the wind industry on track…”
The wind energy industry has reason for concern. America”s appetite for subsidies has waned. Congress is looking for any way it can to make cuts, and the twenty-year old Production Tax Credit (PTC) for wind energy is in prime position for a cut. It naturally expires at the end of 2012. Without action, it will go away.
The payroll tax extension will be a hot topic over the next few weeks as it expires on February 29. Wind energy supporters are pushing to get the PTC extension included in the bill. Whether or not it is included will be largely up to public response. After all, regarding the PTC”s inclusion in the payroll tax extension bill, the February 1 alert stated: “our federal legislators heard us loud and clear.” In the December payroll tax bill negotiations, the wind energy PTC was placed on a “short list of provisions to be extended through that bill.” Wind supporters are worried-hence the rallying cry.
Due to a deteriorating market, Vestas, the world”s largest manufacturer of industrial wind turbines, is closing a plant and laying off workers. Everyday citizens, armed with real life information gleaned from the wind energy”s decades-long history, are shocking lobbyists and killing back room deals by successfully blocking the development of industrial wind plants in their communities. As it becomes widely known that actual wind energy contracts are coming in at three and four times the cost of traditionally generated electricity, and natural gas prices continue to drop due to its newfound abundance, states are looking to abandon the renewable energy mandates pushed through in a different economic time and a different political era. American Wind Energy Association spokesman Peter Kelley reports: “Industry-wide we are seeing a slowdown in towers and turbines after 2012 that is rippling down the supply chain, and the big issue is lack of certainty around the production credit that gives a favorable low tax rate to renewable energy.” All of this spells trouble for the wind energy industry.
The PTC is part of a push for renewables that began in the Carter era. Enacted in 1992, the twenty-year old wind energy PTC was designed to get the fledgling industry going. However, after all this time, wind energy is still not a viable option. Even the industry’s own clarion call acknowledges that government intervention is still needed to keep it “on track.” If the training wheels are removed, it will topple.
Wind energy lobbyists have a plan: HR 3307 will extend the PTC for another four years. If the PTC extension passes, it will add an extra $6 billion to the $20 billion in taxpayer dollars the wind industry has already received over the past 20 years. These are monies we borrow (typically from China) to give to Europe-where most of the wind turbine manufacturers are located.
With advertisements featuring blue skies, green grass, and warm and fuzzy images of families (and not one shot of a 500-foot wind turbine looming over their homes), it is easy for the average person to be taken in and think we should continue to underwrite this “new technology”-after all, there is an energy shortage. “What will we do when we run out of oil?”
Wind energy is electricity and electricity doesn”t come from oil. Even if it did, we don”t have an oil shortage. Electricity comes from clean-burning natural gas and coal-both of which we have in abundance and know how to use effectively. They don”t need an expensive supplement masquerading as a replacement.
Wind energy supporters often tout turbines because of the misguided belief that they will get us off fossil fuels-when, in fact, they commit us to a fossil fuel future. Optimistically, a wind turbine will generate electricity 30% of the time-and we cannot predict when that time will be. Highly variable wind conditions may mean the turbine generates electricity in the morning on Monday, in the middle of the night on Tuesday, and not at all on Wednesday. A true believer might be willing to do without electricity at the times when the wind is not blowing, but the general population will not. Public utilities and electric co-ops cannot-they are required to provide electricity 24/7 and to have a cushion that allows for usage spikes. So, during that average 30% of the time that the turbine blades are spinning, the natural gas or coal-fueled power plants continue to burn fossil fuels-though possibly slightly less in an extended period of windy weather, and full-steam-ahead the remaining 70% of the time. (Research shows that turning up the heat on power plants, and then turning it back down, and up again actually increases the CO2 emissions.) Absent a major breakthrough in expensive energy storage, wind can never save enough fossil fuel to make any significant difference. After twenty years of subsidies, wind energy has not replaced one traditional power plant.
Some argue that many new technologies got their start through government support. This might be a good viewpoint if wind energy were “new.” But after twenty years of subsidies it is little better now than it was in the late 1800s. Windmills produced electricity then, and modern industrial wind turbines generate electricity now. It is not that they do not work; they do. They just don”t do so effectively, economically, or 24/7-and they still need Uncle Sam (ie, taxpayers and consumers) to prop them up.
Those who favor free markets need to seize upon this opportunity to push for the government to get out of the business of picking winners and losers. Clearly the “green” experiment has failed. Billions have been lost in the effort.
If we truly believe in free markets, why stop at just cutting the subsidies to wind energy? Stop the subsidies to all energy! May the strongest survive! The fact is, such a move is afoot. While HR 3307 aims to stretch out the subsidies for wind energy, HR 3308 will stop subsidies for all energy sources-wind and solar, oil and gas. The playing field will be level; billions will be saved!
A congressman I spoke to fears that, in the current political climate, his colleagues will cave on the wind energy subsidy, as they seem unwilling to take a strong stand on any issue. While wind energy supporters are calling their representatives, free-market advocates and everyone who believes the government-gone-wild spending must stop have to place a call, too. Call, or e-mail, your Congressman, and as many others as you can take the time for, and tell them to stop subsidizing energy. Tell them:
“Do not include HB 3307 in the payroll tax extension bill. Support HR 3308 which will repeal the PTC and numerous other renewable energy tax incentives, including the investment tax credit, the cellulosic biofuel producer credit, the tax credit for electric and fuel cell vehicles, and tax credits for alternative fuels and infrastructure. Additionally, HR 3308 will also repeal the enhanced oil recovery credit for producing oil and gas from marginal wells.”
Instead of propping up energy policy based on politics rather than sound science, we have to prop up our representatives and give them the backbone to do what is right. Tell them to end energy subsidies!