OPINION:Not Extending Wind Credit Hypocritical
Scott Sklar, President, The Stella Group, Ltd & Adjunct Professor GWU
August 6, 2012
In light of the massive existing subsidies for petroleum and nuclear energy, the policy idea to allow the wind energy production tax credit expire is not only absolute poor public policy but an extreme act of hypocrisy. The May 2011 International Energy Agency study on the costs of wind reported, "Between 1980 and the early 2000s, significant reductions in capital cost and increases in performance had the combined effect of dramatically reducing the levelized cost of energy (LCOE) for onshore wind energy. Data from three different historical evaluations, including internal analysis by the Lawrence Berkley National Laboratory (LBNL) and the National Renewable Energy Laboratory (NREL) as well as published estimates from Lemming et al. (2009) and the Danish Energy Agency (DEA) (1999), illustrate that the LCOE of wind power declined by a factor of more than three, between 1980s and the early 2000s . An analysis by Citizens for Tax Justice and the Institute on Taxation and Economic Policy found dozens of companies that had a negative tax balance between 2008 and 2010, while making billions in profits. During these years of negative taxation, 32 companies in the fossil-fuel industry -- from Exxon Mobil and Peabody Energy to ConEd and PG&E -- transformed a tax responsibility of $17.3 billion on $49.4 billion in pretax profits into tax benefits of $6.5 billion, a $24 billion windfall. The official corporate tax rate in the United States is 35 percent, but subsidies and dodges make that figure meaningless. The overall tax rate for top utility companies from 2008 to 2010 was 3.7 percent the 2011 report found according to a Grist review. According to oil expert Todd Neeley, he listed 23 federal oil subsidies, 26 state oil subsidies, ranging (in 2010 dollars) from $133.2 - $280.8 billion dollars annually, or a minimum of 96 cents per gallon of gasoline produced. The 2011 Union of Concerned Scientists released a report about the subsidies for nuclear power. The report, “Nuclear Power: Still Not Viable Without Subsidies,” found that more than 30 subsidies have supported every stage of the nuclear fuel cycle, from uranium mining to long-term waste storage. Added together, these subsidies often have exceeded the average market price of the power produced. The absolutely only reason the wind PTC was being questioned, is that some Members of Congress (and candidate Romney) want to show they are different from President Obama by ardently not supporting anything perceived as "green energy" . Thank goodness, we have some Republican and Democratic statesmen still left in the US Congress that are trying to bring some energy balance and parity in the marketplace.