The wind production tax credit has long outlived any public policy usefulness. Late in 2013, Big Wind fought fiercely to renew its expiring subsidy but failed. We hope that means many members of Congress see this as a mature industry that long ago outgrew its infancy and understand that the nation’s new wealth of lower-cost natural gas has profoundly rewritten U.S. energy economics.
In the early 1990s, with dreams of cheap and clean wind energy ascendant, Congress lavished a generous subsidy on power from the tall, twirling turbines. The wind industry responded, and since then has increased its installed generating capacity 30-fold.
For 20-plus years the subsidy has been intermittent, although not as unreliable as the winds that drive the turbines. The most recent authorization, a 2013 extension tucked into the federal budget deal that avoided the so-called fiscal cliff, expired Dec. 31. Applause, please, for our do-little Congress: What’s known as the wind production tax credit has long outlived any public policy usefulness. Lawmakers now being urged by industry lobbyists to renew the subsidy retroactively instead should let it blow away.
We say this with no animus toward the bucolic concept of wind energy, whose clean-and-green image is to electrical generation what puppies and kittens are to the animal kingdom. Our concern is the reality of subsidized wind energy at a time when natural gas is more plentiful, and cheaper, than Washington could envision in the 1990s. Today wind generation is a comparatively expensive proposition that, whenever its tax subsidy temporarily has vanished, has seen the new construction of wind farms all but vanish too. These welfare payments to the industry have incentivized private investors to sink money into wind projects that, without the federal freebie, they’re eager (and probably smart) to avoid.
Like its cousins, the ethanol and solar industries, the wind lobby basks in political correctness and political favoritism: Big Wind, too, has grown comfortable in its dependence on federal and state governments that decide which energy industries will be winners or losers — discrimination enforced by squeezing taxpayers or rigging regulations.
News about eagles killed by turbines is an issue separate from government coddling, but one now emerging as a public relations debacle. In late November, Duke Energy agreed to pay $1 million in fines in the first criminal case brought against a wind company over the killings of federally protected birds, 14 golden eagles and 149 other protected birds slain at two wind projects in Wyoming. Robert G. Dreher, an acting assistant U.S. attorney general, explained the violation of the Migratory Bird Treaty Act: “In this plea agreement, Duke Energy Renewables acknowledges that it constructed these wind projects in a manner it knew beforehand would likely result in avian deaths.”
Duke said it is working with federal officials and field biologists to determine when it should shut down its turbines to limit bird deaths. But the U.S. Fish and Wildlife Service says it is investigating similar cases elsewhere — and has referred seven of them to the U.S. Department of Justice for prosecution.
Motor vehicle drivers, illegal hunters and deaths by poisoning kill more eagles than turbines do. But growing publicity about wind farms chewing up eagles undercuts the industry’s promotion of itself as environmentally friendly. The National Audubon Society and other conservation groups are especially exercised about a new federal rule, announced in December, that lets wind farms obtain 30-year permits to lawfully kill bald and golden eagles. Many Americans who only have heard about neighbors of wind farms criticizing the turbines’ thrumming noises will have a far easier time relating to criminal cases based on huge blades pulverizing wildlife.
All of which pins the Obama administration between its dueling political loyalists: environmentalists learning about the 30-year eagle kill permits, and fans of renewable energy sources that don’t spew carbon dioxide.
Wind energy’s peculiar problem is that, because wind blows erratically, companies that rely on it also need backup generating capacity — typically fossil-fueled — for days when customers want electricity but the air is still.
The obvious solution here is for Congress and the White House to stop manipulating the tax code as America’s de facto energy policy: Thorough federal tax reform should sunset this arbitrary favoritism for wind energy and other politically favored industries.
Late in 2013, Big Wind fought fiercely to renew its expiring subsidy but failed. We hope that means many members of Congress see this as a mature industry that long ago outgrew its infancy and understand that the nation’s new wealth of lower-cost natural gas has profoundly rewritten U.S. energy economics.
The wind lobbyists will be back in 2014, pleading for more handouts from American taxpayers. Tell your members of Congress that a government $17 trillion in debt — and still borrowing heavily — can’t afford to keep protecting this industry from cheaper competition.