The Obama administration is making a final attempt to bolster the President’s promise of supplying our nation with cleaner, more efficient energy. But before Congress votes on extending a $12 billion federal tax credit for wind energy companies, it’s important for the Senate and House to recognize the implications encompassing their decision.
The extension, should it pass, provides tax breaks for wind companies; a niche within the energy industry that advocates say is essential to developing not only more wind farms, but also in supporting the thousands of jobs supplied by the manufacturers. Advocates claim the tax breaks are essential; without them, the wind turbine market will plummet by 80 percent next year.
Tax breaks are important to the energy industry. They help foster development and steer industries in a positive direction. The real question is whether the current administration will continue to favor some energy sources over others. If President Obama is serious about his “all the above” energy plan, he should be encouraging all forms of energy production, as opposed to selecting winners and losers for political expediency.
Wind, like other renewable forms of energy, is important and should be encouraged, but our nation must be careful to not to disfavor one form over another. Clean coal, natural gas and even other traditional forms of fossil fuel, such as oil, must all be given an equal opportunity for the foreseeable future. It is also important to recognize that if renewables such as wind and solar are given free reign, they cannot produce sufficient amounts of electric generation to replace traditional forms of energy.
If tax breaks are extended, they must be broadened for the entire industry, not just for those in vogue at the moment. Investment in energy can certainly help propel our economy forward, yet the president’s track record on this matter has been hardly stellar.
For example, the administration continues to block real infrastructure projects like the Keystone XL pipeline, a $7.2 billion project. Not only will the pipeline generate thousands of high-paying jobs and help offset our dependence on overseas oil, it will pump billions of dollars into our economy without increasing the debt. This is in direct contrast with the wind energy tax, which may reduce our nation’s tax revenues may be reduced by nearly $12 billion. Historically, credits for the oil and gas industry tend to generate more money than the credit itself, unlike the wind credit currently up for debate.
Tax credits can play an important role, but care must be taken that credits doled out by the federal government do not cost us more in the long run than they’re worth.