Yeah, it’s a dirty business and the chemicals that are used nowadays to extract oil and gas in hydraulic fracturing are even dirtier. But whether it’s Brent, West Texas Intermediate or Russian Export Blend, this is the stuff that heats our homes, fuels our cars, drives our economy.
Oil touches almost every aspect of our lives; we get thousands of everyday products, from medicines to plastics to fibers for clothing, from oil.
Unfortunately, there are two problems with oil: supplies will eventually run dry and the emissions from gas-powered vehicles are bad for our health.
Which is why I’m hoping that Congress gets its act together and immediately adopts an extension of the wind-production tax credit.
The opposition claims that this tax is anti-free market.
To a degree, they’re absolutely right. But they’re missing the bigger point. Without a robust mix of alternative fuels, the free market as we know it won’t be around to defend.
Depending on your viewpoint, government subsidies can be nothing more than corporate welfare. However, the same fiscal conservatives who are fighting against the extension of this tax don’t seem too upset about the billions of dollars in subsidies that Big Oil gets every year.
Thanks to the lack of action in Congress, hundreds of jobs in Colorado already have been lost. Northern Colorado has been especially hard hit, given the presence of Vestas in Brighton and Windsor.
The company has blamed a slowdown in the U.S. wind industry this year largely on the uncertainty over the wind tax credit, which is set to expire at the end of the year.
Vestas CEO Ditlev Engel said the company expects next year to be tough for the wind industry, which is as clear a signal as any that more job cuts are possible.
We can’t afford this, not now and certainly not in what is sure to be an oil-starved future.
The program in question allows wind projects that sell renewable energy to a utility to take a tax credit of 2.2 cents per kilowatt-hour for the first 10 years of a project’s operation.
It’s worked nicely thus far; generating more than $1 billion a year for the industry, according to the Joint Committee on Taxation.
Instituted in 1992, the PTC was renewed in 2009 as part of the economic stimulus. But it was allowed to lapse several times before, and each time, sharp drops in the industry followed.
To their great credit, our state’s senators, Michael Bennet and Mark Udall, have been leading the charge in hopes of extending the credit.
“An extension (of the tax credit) will support this vital industry at a crucial point in its development and save thousands of jobs in Colorado and tens of thousands across the rest of the country,” Bennet said in a statement last month. “We are seeing firsthand how Congress’ failure to act on an extension of the wind PTC is killing jobs right here in Colorado.”
In all, the U.S. wind energy sector employs about 75,000 people – 5,000 or so of those in Colorado. About 9.2 percent of electricity generated in Colorado comes from wind power, according to the American Wind Energy Association. That number is expected to climb to meet Colorado’s renewable-energy portfolio standard requiring 30 percent of the state’s electricity to be generated from renewable sources by 2020.
An extension of this tax credit not only could spare us further cuts in Colorado but actually add tens of thousands of jobs nationwide over the next few years.
Better yet, it keeps the U.S. wind market competitive against rivals in Europe and elsewhere.
Tax credits reduce federal revenues, no doubt. But so do job losses, at a rate that is undoubtedly even more costly to federal coffers.
One last thought (for now) on this topic: it’s time that Colorado gives serious consideration to a feed-in tariff.
A growing number of countries worldwide rely on these tariffs, which require utilities to pay small-turbine wind project owners a set rate per kilowatt hour for any excess electricity they generate.
Some have tried to get the ball rolling on this in Colorado but, proponents say, the state’s major utilities quietly killed legislation to merely study the question in 2011.
Meanwhile, Saudi Arabia is planning to spend $100 billion of its oil dollars to develop solar power.
So tell me, why aren’t we doing that?
Allen Greenberg is the editor of the Northern Colorado Business Report. He can be reached at 970-232-3142 or email@example.com.