Romney's views in this matter also clash with common sense. For those who want to know, I'll get to the details in a minute. But for now, the important thing about the production tax credit is that it works. However, for months now, it's been in limbo. It sunsets on Dec. 31. This has happened three times previously. Each time the credit is revived. But each hiatus causes havoc within the industry and its suppliers. That's what we're beginning to see again. Since wind farms typically take 18 months to complete from the time a permit is received until the turbines are up and spinning, investors already are shying away from new projects because of the iffy nature of the credit's future. Fewer investors means fewer wind farms, fewer technological innovations, fewer jobs and more dependence on the fuels that nature is informing us every day we must stop burning.
There was, finally, one bit of good news last week. The Senate Finance Committee managed to stick a one-year extension on the production tax credit in legislation it sent to the whole Senate. But while that item may pass the upper chamber, in the House a determined, climate-change-denying crew of know-nothings and fossil-fuel fans will do what they can to scuttle it. And they'll have Mitt Romney on their side.
He spoke against the production tax credit while he was in Iowa last week. But this isn't the first time he's expressed opposition. This time, after he did, Obama campaign spokesman Adam Fetcher had this to say:
By opposing an extension to the wind production tax credit, Mitt Romney has come out against growth of the wind industry to support 100,000 jobs by 2016 and 500,000 jobs by 2030. Meanwhile, he supports $4 billion in oil and gas subsidies for companies that have rarely been more profitable.Half a million jobs down the chute. No big deal to the Bain buccaneer. For a guy who likes to fire people, this would be the cherry topper.
Too bad the Obama campaign must maintain a sense of decorum. It would be good to hear Fetcher or others just say flat out what this stance on energy means. Either: 1) Romney is a numbskull; or 2) Romney is up to his eyebrows with his fossil fuel buddies and will kill jobs and continue wrecking the planet just so they all, and he, can profit.
There is a good reason Iowans love wind power. Their state not only gets 19 percent of its electricity from wind turbines, the second highest percentage in the nation, but the wind industry also provides as many as 7,000 jobs in the state. Some 85 percent of Iowans think wind power is beneficial, according to a poll commissioned by the American Wind Energy Association, an industry group. Even 41 percent of Iowa Republicans told pollsters they are less likely to support a presidential candidate who doesn't favor expanding wind power.
Iowa isn't the only state getting a high proportion of its electricity from the wind. South Dakota is first, with 22 percent. North Dakota, Minnesota and Wyoming all get at least 10 percent of theirs that way. All told, wind has an installed generating capacity of 49 gigawatts in the U.S., about 4.3 percent of the nation's total. Wind generated slightly more than 3 percent of total U.S. electricity in the United States during the 12-month period ending in May this year.
That may not seem like much. But a decade ago, it was one-tenth that. Phenomenal growth.
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Just 10 years ago, boatloads of so-called "experts" were saying renewable sources of power, including wind, would never amount to much. In 2002, for instance, the federal government's official forecast projected that the U.S. would add less new electricity-generating capacity from renewables by 2020 than was added from wind alone by 2007. Let that sink in for a second: The forecast of the guys who are supposed to know was off by 13 years. The International Energy Agency's forecasts have been even worse. These off-base forecasts have led a lot of smart people to say things like: Wind power will never amount to anything.
Subsidies constitute a crucial element of wind power's leapfrog growth everywhere in the world it has demonstrated success. In the case of the United States, the subsidy, introduced in 1992 during the first Bush administration, is the production tax credit Romney wants to jettison.
It's straightforward. For every kilowatt-hour generated during the first 10 years of a wind (solar, geothermal or closed-loop bioenergy) facility's life, the government provides 2.2 cents. That's an obvious attraction for investors in a technology that in many places can't yet compete, economically speaking, with established methods of generating electricity. But in some places it already can compete, and it's getter closer every year.
The idea has always been to eliminate the subsidy once a renewable industry reduces its production, installation and operating costs low enough to compete with other energy sources. They do this both with more efficient technology and economies of scale. Wind power developers have already made gigantic strides in both arenas, and additional advances are being developed every day. Wind turbines now are more powerful, more efficient and more capable of producing electricity at lower wind speeds than they were even 10 years ago, much less 30 years ago when the first modern versions were installed. But wind power still needs this modest subsidy boost before it can get a truly solid footing. Many wind advocates put that horizon at around five years.
The latest proposal, the one that was passed by the Senate Finance Committee Thursday, would extend the credit for just one year. That's better than letting it expire, but not long enough to give investors real confidence. We need five years at least, but a decade would be better. Better yet would be a gradually dwindling feed-in-tariff a la Germany or Japan. But that's clearly a hurdle too high for a Congress of the current composition.
Republicans and libertarians have had tantrums over this production tax credit. Despite the long history of subsidies to the fossil-fuel and nuclear industries, they want to "level the playing field" and no longer "play favorites." This government meddling is unseemly, they say, as if Bolsheviks had grasped the nation's energy policy.
In the case of Mitt Romney, it's charitable to call this level-the-playing-field kind of talk a pile of manure.
Libertarians can make a more principled case. Many, perhaps most, would lop all subsidies. But their argument fails on two grounds. First, there are residual benefits from decades of subsidies. So the "playing field" is not made level just by cutting off subsidies now for everyone. Second, as noted in a previous essay—solar subsidies follow a path well known to oil, gas, coal and nuclear industries—it has traditionally taken about 30 years before subsidies boost a specific energy industry into a self-sustaining entity:
These subsidies aren't required forever. They are meant to get the industries up and running and gaining enough market share to drive further innovation and lower costs. It just takes time. Like it did with other energy industries. The ones that still get subsidies of various sorts. While howling about the new kid on the block. The ecologically crucial new kid.There's another issue as well. Economic "externalities." These include safety and health risks affecting workers, water and air pollution, climate-changing emissions and military spending to maintain access to world oil resources. These externalities aren't accounted for in the price of electricity generated from fossil fuels. Thus, these forms of energy get a hidden subsidy. While renewables also contain externalities, their impact is far less than for fossil fuels or nuclear power. As the joke goes, what's the environmental damage from a wind-turbine spill?
As mentioned above, some Republicans are not on board with Mitt's plans to kill green-energy subsidies. They actually see the benefit, perhaps a self-interested benefit, say investment opportunities or campaign cash. Or perhaps a few of them just don't buy the mainstream GOP's conventional wisdom these days that clean energy is, like global warming, some kind of byzantine hoax.
It would be tempting, given the trail of error we just witnessed on Romney's six-day European tour, to chalk up the guy's stand on energy to cluelessness. But that would be a mistake. For one thing, even his advisers who support the production tax credit stand foursquare behind policies favoring carbon-emitting sources of electricity generation. They see clean energy as a sideshow; however, they don't want to crush it.
In many ways, Romney is a buffoon. But it should never be forgotten that while we justifiably ridicule him, he is also a predator. As we have seen, his approach to business is like that of the buffalo hunters of the 1870s. Shoot the animal, skin it and leave the carcass behind to rot.
That's the type of politician the fossil-fuel industry has always sought to fulfill its needs. That's what Romney is about. He doesn't understand a creative business like green energy. Only the kinds that suck a resource dry and leave the wreckage of its exploitation behind. That's how he ran Bain. That's how he would run the nation. That he can state in the same breath that maintaining subsidies for carbon-based fuels while dumping them for clean energy makes for a balanced approach reinforces what we know about who he is.
It is tempting to say that, in addition to his buffoonery, Romney is blinkered. But that's not so. He knows exactly what he is doing and where he will go if he has the imprimatur of a November victory. That destination, in energy as in so much else, is a dead-end.