Mitt Romney Wants to Kill Wind-Power Tax Credits, Which Worries Texas' Wind Industry

Categories: Biz, Politics

BrazosWindFarm.jpg
Wikipedia
The Brazos Wind Farm in West Texas probably wouldn't exist without the federal tax credit set to expire in December.
Mitt Romney did himself no favors in Iowa when a spokesman told the Des Moines Register the candidate would "allow the wind credit to expire, end the stimulus boondoggles and create a level playing field on which all sources of energy can compete on their merits."

In Iowa and much of the Midwest, the 2.2 cent-per-kilowatt-hour tax break for wind-power producers has helped establish a burgeoning wind industry, create jobs, and has opened a new source of income for farmers who install turbines on their land. It's politically popular and enjoys broad support from Democrats and Republicans alike. Romney's suggestion that it should end was roundly panned.

But what about Texas? Political sentiment here is no doubt much less unified on the wind credit issue, but we do have a thriving wind industry and produces more than twice as much power as any other state. What happens if the tax credit, which costs the federal government $1.6 billion per year, is allowed to expire in December?

David Carr, assistant director of the Alternative Energy Institute at West Texas A&M University, has been studying the industry since 1970. His short answer: Fewer wind projects will be built. A lot fewer.

If you look at a graph of wind development in Texas over time, you can get an idea, Carr says. There have been a couple of occasions that Congress has allowed the credit to expire before renewing it. During those times, the chart shows a sharp drop in new development. To be profitable without subsidy, a wind farm has to be in a location that has both a lot of wind and close proximity to transmission lines, which is rare. All told, Carr estimates that 70 percent of wind development in the state would not exist were in not for the federal subsidy.

So there would be a lot less wind power. But what of Romney's argument that the market should determine what forms of energy we use and produce? Carr didn't mention the obvious environmental benefits of wind, which one could argue justify some government help, but he dismissed the idea that the wind tax credits do anything but level the playing field.

"Most people in the wind industry don't want any special favors," he said. "It's just that there's built-in tax credits for coal and gas, even natural gas."

Already, new wind developments have stalled as the industry waits to see if the tax credits are extended, and things aren't looking particularly promising at the moment.

"Unfortunately, it's divided largely on partisan lines," Carr said. "And Romney saying (he's opposed) makes it worse."

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11 comments
scottindallas
scottindallas topcommenter

Livefyre doesn't allow me to post on my phone, so these comments are belated. 

 

Romney is right on here.  Wind works 8% of the time.  That is utterly worthless, as that 8% tends to come when it's needed least.  We don't have the ability to store the electricity, so wind is a waste.

 

I might support some uniform subsidy, in exchange for utilities-type regulation and capping of profits at 10%. 

mtracy9
mtracy9

Romney is a shill for the oil companies. He supports taxpayer subsidies to oil companies, while opposing them for wind companies.

EdD.
EdD.

So the oil exploration and drilling subsidies will be ended, too? Hmm.

pak152
pak152

"This is how preposterous the finances of the great wind scam have become – to yield, very inefficiently, only a fraction of our electricity. (One medium-sized gas-fired power station can produce 800MW, reliably, all the time, at a fraction of the cost.) Even David Cameron last week criticised onshore wind farms as “over-subsidised and wasteful of public money”."

http://www.telegraph.co.uk/comment/columnists/christopherbooker/9120756/How-much-profit-will-a-turbine-turn.html

yes the article is from England but they have the same preposterous subsidies for wind

Tim.Covington
Tim.Covington

And, does he plan on ending the ethanol mandate and subsidies. That would return more money to the federal coffers, improve fuel efficiency, lower food costs, and improve air quality.

everlastingphelps
everlastingphelps topcommenter

When ALL the rent seekers are nervous about a candidate -- not just "the other side's" rent seekers -- that is a Goodness Thing.

gibken
gibken

 @Tim.Covington Maybe in Texas, but n other parts of the country, like the upper midwest where I live, ethanol is a HUGE part of the economy.  Take away ethanol and states like Iowa, Nebraska, Missouri, etc have their gas prices go WAY up.  However, I do agree that if you're going to end wind energy tax credits you should end ALL energy tax credits.  Unfortunately, Mr. Romney has not said he would support that.

ifpt999
ifpt999

 @everlastingphelps I agree. I'm for killing wind-power tax credits, and all other energy subsidies for that matter (especially ethanol). It's disappointing that Romney hasn't come out hard against ethanol - but I'll take one fewer subsidy if I can have it.

scottindallas
scottindallas topcommenter

 @gibken Ethanol is a farm bill.  40% of our corn crop goes to ethanol.  It's NOT widely used in those states, as ethanol offers less bang for the buck.  It's not cost competitive, and is jacking up food prices.  Ethanol won't raise gas prices there, there were just a few E85 stations in the area prior to the mandate, and they weren't popular.  They pay for gas like we do.  So long as the Keystone pipeline is not running, the midwest has been enjoying lower prices than the rest of the country.  However, the recent refinery fire in Ill, might change that for the immediate time.

ifpt999
ifpt999

 @oakclifftownie Unfortunately, ethanol is a two player game. Both parties support it sadly. It's probably because of Iowa's unique place in choosing presidential nominees. 

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