A wind farm in Texas
Credit: U.S. Department of Energy
Congresswoman Jan Schakowsky (D-IL) introduced the Promoting Energy Efficient Renewables Act of 2013. This bill permanently extends the Production Tax Credit (PTC) for wind energy, which is set to expire at the end of this year. Just as importantly, the extension would be funded by eliminating three oil and gas credits: the tax credit for intangible drilling costs, the domestic manufacturing tax credit for oil and gas, and the percentage depletion credit for oil and gas wells. The PTC allows smaller clean energy providers to remain cost competitive in today’s market, one that is heavily dominated by subsidized and well established fossil fuel companies. Through 2009, fossil fuel companies received at least $450 billion (in today’s dollars) in credits and subsidies from the federal government. By contrast, renewables received less than $6 billion in that same period. Adding to this, the Production Tax Credit is an important catalyst for investment that has already attracted $15 billion per year for the wind energy industry since 2008.
Without a long-term extension of the PTC, we will see investments in wind energy projects dry up and they will be abandoned across the country. This would be disastrous for the renewable energy industry and the economy as a whole as the wind energy industry is a vital, growing part of the economy.
In order to pay for an extension of the PTC, Rep Schakowsky has proposed to end tax breaks from the taxpayer to an industry that makes billions of dollars in profits every year. Specifically, a hefty 35.1 billion dollars of taxpayer money is used to fund the three oil and gas credits the bill would eliminate. This shows the good sense of the bill. Not only does it promote renewable energy production and end tax breaks for an incredibly profitable industry, but the bill also cuts the deficit. It is a win-win for the American taxpayers.
Oil and gas development is a major issue confronting our public lands. But it is important to remember that renewable energy on public lands have large impacts as well. That is why The Wilderness Society has long advocated a “Smart from the Start” policy when it comes to energy development on public lands. While we certainly support a transition from a fossil fuel based economy to one that is focused on clean and renewable energy, as an organization we are continuing to make sure that these renewable energy projects are directed to low impact places that do not spoil our wild lands and important habitats.
This bill displays the folly of giving tax breaks to an industry that has claimed over a trillion dollars in profits over the last decade but it also helps a growing industry that is moving our economy away from a fossil fuels based one to a clean energy one.
To read more about the individual tax credits see:
Expensing of intangible drilling costs: http://wilderness.org/blog/12-days-giveaways-day-1
Domestic manufacturing credit for oil and gas: http://wilderness.org/blog/12-days-giveaways-day-6
Percentage depletion credit for oil and gas wells: http://wilderness.org/blog/12-days-giveaways-day-4