Posted by Marita
Noon @ Brietbart.com
Congress has taken
action that actually advances free markets and limits government intrusion. I
was in the room when, on September 17, the House Energy and Commerce
Committee—with bipartisan support—advanced legislation to lift the 1970s-era
ban on crude-oil exports. HR 702, “To adapt to changing crude oil market
conditions,” is expected to receive a full floor vote within a matter of weeks.
The export ban is a
relic of a bygone era during which ideas like “peak oil” and “energy scarcity”
were the conventional wisdom. Despite all those who cried “wolf,” the U.S. is
now the world’s largest combined oil-and-gas producer.
Ending this
obsolete ban would unleash America’s energy producers on the global market,
increasing domestic production and creating jobs. Additionally, reports from
experts at the non-partisan Energy Information Administration and Government
Accountability Office, plus consultants at IHS,
indicate that it will also lower prices at the pump.
Like everything
that seems to happen in Washington, DC, these days, this initial victory may
have a price tag that prevents its final passage.
Getting the
Democrats on board with removing the barrier to exporting America’s abundance
may likely require giving them something they want. Morning Consult recently
reported:
“Momentum is building in Congress to repeal the antiquated ban on exporting
crude oil. Lawmakers and energy industry representatives are talking about
other energy policies that could be swapped or combined to achieve that
objective. Renewable energy tax credits are part of the equation."
Those “renewable
energy tax credits” are mainly two: the wind Production Tax Credit (PTC) and
solar Investment Tax Credit (ITC). Like the oil-export ban, the wind PTC is an
archaic policy that has no place in today’s modern reality of energy abundance.
Passed by Congress
in 1992, the PTC pays the wind industry for every kilowatt-hour of electricity
generated over a ten-year period. No other mature energy source—natural gas,
oil, or coal—can claim a similar carve out based on how much product they sell.
The subsidy is so lavish that wind developers can sometimes sell their
electricity at a loss and still profit. The New York Times has described
this as wind’s “cannibal behavior” on the power grid.
The PTC costs
taxpayers like you and me billions of dollars each year. Americans pay for wind
twice: first in their federal tax bills, then in their local utility bills.
According to a new study, commissioned by the Institute for Energy
Research, electricity generated from new wind facilities is between three and
four times as expensive as that from existing coal and nuclear power plants.
The Senate Finance
Committee claims a two-year extension would cost $10
billion over the next decade. After decades of subsidies and multiple PTC
extensions, wind still generates less than 5 percent of our electricity.
Congressman Mike
Pompeo (R-KS), who has long opposed the PTC extension, told me: “With a
skyrocketing $16 trillion debt and an industry that is more than capable of
standing on its own, there is no reason why the federal government should
continue to subsidize the wind energy industry. Proponents of the Wind PTC
continue to call for an extension—for the umpteenth time. This handout costs
taxpayers billions and has caused significant price distortions in wholesale
electricity markets that translate into real costs for everyday consumers. If
we want a robust economy, it’s time to stop picking winners and losers in the
energy marketplace and finally end the wind PTC. After two decades of pork, the
wind looters need to stand on their own two feet. Most of the people in the
wind industry I talk to know this, and I am confident that those individuals
and others in the energy industry will enjoy many marketplace successes once we
put a stop to the purely political policies that we have seen to date.”
Despite the
mountain of evidence against wind subsidies—including increasing reports of health
issues and concerns over bird kills—this summer, before the August recess,
the Senate Finance Committee rushed through a package of expired tax
provisions, including the wind PTC. Now, wind lobbyists are looking for a
legislative “vehicle” to latch on to, preferably one with bipartisan support,
to push through another PTC extension without a fair hearing, which is exactly
why they’re eyeing the oil-export bill.
According to The
Hill, Senator Ed Markey (D-MA) said he could consider lifting the ban “only if
it’s tied to a permanent extension of the wind and solar tax credits.”
Swapping the PTC
for oil exports is a bad deal, as lifting the ban deserves to pass in its own
right. But what many don’t realize is that trading the PTC for oil exports is
also a Faustian bargain that furthers President Obama’s destructive
climate-change agenda.
The PTC and the
president’s climate agenda are related because Obama’s sweeping new carbon
regulations, known as the “Clean Power Plan”—finalized in August—require states
to drastically cut carbon dioxide emissions. It does this by shuttering
low-cost coal plants and building new wind and solar facilities. The problem:
wind and solar are uneconomic without massive taxpayer handouts like the PTC
and ITC and market-distorting mandates like state Renewable Portfolio
Standards.
This scheme is the
centerpiece of Obama’s climate legacy, which he hopes to cement in December at
the United Nations climate conference in Paris.
These carbon
regulations will inflict severe burdens on American families—especially the
poorest among us who can least afford to pay higher energy prices. A recent study by the National Black Chamber of
Commerce, for instance, found that Obama’s carbon rule would increase Black and
Hispanic poverty by 23 and 26 percent, respectively. For all that pain, the
regulations will, perhaps, reduce global temperature rise by 0.018 degrees
Celsius in 2100—an undetectable amount.
Buried in hundreds
of pages of “analysis,” the Environmental Protection Agency projects the wind
industry will add more than 13 GW of electrical capacity each year from
2024-2030. For context, 13 GW is exactly how much capacity wind added in 2012,
a record year. It is also the year in which rent-seeking wind barons rushed to
build as many new turbines as possible to quality for the PTC, which expired at
the end of the year. The following year, after the PTC expired, wind additions
collapsed by more than 90 percent—which highlights the fact that the wind
industry cannot survive in a free market.
This makes the wind
PTC vital to Obama’s carbon regulations. His plan depends on exponential wind
growth, and the wind industry depends on government handouts like the PTC to
avoid total collapse, let alone grow.
By not accepting a
wind PTC tradeoff, Congress can deal a blow to corporate wind welfare and
Obama’s carbon regulations in one shot. Congress must strip the PTC out of tax
extenders and refuse to use wind subsidies as a bargaining chip. The two are
totally unrelated. One is a liquid fuel used primarily for transportation. The
other: a way to generate electricity, albeit inefficiently, ineffectively and
uneconomically. One helps our trade deficit problem and increases revenues as FuelFix
reports: “liberalizing crude trade spurs more domestic
production, with a resulting boost in government revenue from the activity.”The
other: a hidden tax that hurts all Americans.
By rejecting an
extension of the wind PTC and lifting the ban on oil exports, Congress would
end corporate welfare for wind lobbyists, deal a blow to Obama’s costly carbon
regulations, and free America’s entrepreneurs to provide abundant, affordable,
and reliable energy for all.
The author of Energy Freedom, Marita Noon serves as
the executive director for Energy Makes America Great Inc. and the
companion educational organization, the Citizens’
Alliance for Responsible Energy (CARE). She hosts a weekly
radio program: America’s Voice for Energy—which expands
on the content of her weekly column. Follow her @EnergyRabbit
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