Take some of Big Oil’s obscene profits and invest the money in developing clean renewable energy for the future. This is the Democrats’ big idea on energy and it’s a good one, but right now Democrats are botching it badly.
On June 18th, Congress failed for the tenth time this year to pass an extension of the renewable energy tax credits that have nurtured the infant wind and solar power industries in the US but are set to expire at the end of 2008. The tax credit extension should have been included in the big renewable energy bill that Congress passed at the end of 2007, but Republicans blocked the provision because they didn’t like closing oil tax loopholes to pay for it.
Some Democrats, like Washington Senator Maria Cantwell, got it, and shifted the approach. Cantwell drafted a bipartisan bill, cosponsored by Nevada Republican John Ensign, to renew the tax credits without requiring a budget offset that would draw a Republican filibuster or a Bush veto.
The problem is that a contingent of House Democrats has continued to insist that no renewable energy tax credit extension be passed unless it can be paid for by cutting some other budget item or by adding revenue — like increasing taxes on Big Oil. These “pay-go” rules are supposed to establish Democrats as the anti-deficit party and the House leadership has been unmovable on the principle when it applies to renewable energy.
But Democrats seem to have a double standard, turning into bendable Barbies when it comes to bailing out bankers or funding the Iraq war. Solar energy industry lobbyist Scot Sklar said that Congress has all sorts of “creative bookkeeping” techniques it can use to justify new spending, they just don’t want to do it for renewable energy. The question is, why?
I spoke with S. David Freeman, author of Winning Our Energy Independence: An Energy Insider Shows How, about the situation. Freeman is a bona fide “energy guru,” having worked on federal energy policy since the Kennedy administration, and he was spitting mad. He called the pay-go principle a “bureaucratic rule” and said Democrats could bypass it if they would “get their act together.”
“They are using two different rules,” he said. “They can go to war on credit, but they can’t save the planet on credit. If Congress applied the pay-go rule to the war we would have no war in Iraq.”
Freeman said that Congress is not getting the urgency of our energy and climate crisis. “We are in a fight for our lives and Congress acts like it’s a Fourth of July picnic … the Democrats won’t do anything until the issue gets to a fever pitch.”
NASA climate scientist James Hansen hammered on the urgency of the “fight for our lives” to congressional staffers at a briefing on June 24th. He said “we have used up all slack in the schedule for actions needed to defuse the global warming time bomb…a path yielding energy independence and a healthier environment is, barely, still possible. It requires a transformative change of direction in Washington in the next year.”
For the renewable energy industry, it is already too late to avoid disruptions caused by letting the tax credit expire. The uncertainty around the tax credit is slowing investment now. Michael Eckhart, president of the American Council on Renewable Energy (ACORE) said, “This is outrageous and intolerable. The time to act is overdue. We’re not calling for next week. It’s months ago that this should have been done.”
A study earlier this year by Navigant Consulting found that 112,000 jobs in the wind and solar industries could be lost if Congress lets the renewable energy tax credits expire. A study by GE Energy Financial Services showed that tax credits for wind will eventually pay for themselves by producing taxable economic growth. In these recessionary times, you would think that Congress could justify the small expense – one month of Iraq war spending would pay for ten years of renewable energy tax credits – as a vital economic stimulus.
In fact, this is exactly what some Republicans are now saying. Citing the need to protect renewable energy investment and jobs in Nevada, Senator Ensign is holding up the 300 billion dollar housing relief bill in an attempt to attach the Cantwell-Ensign renewable energy tax credit extension. “We are trying to get that on probably the only bill – or at least one of the only bills – that’s going to be signed into law this year and that’s the housing bill,” Ensign said. But Ensign’s fellow Nevadan, Senate leader Harry Reid, said the move was pointless because House Democrats will never accept it. He said it was “a waste of time to pass unpaid-for extenders.”
Fox News reported that Reid got a letter from the 48-member “Blue Dog” group of Democrats warning that the housing bill would not pass the House if the renewable energy tax incentives were extended without offsets.
Usually in conflicts over federal energy policy, the battle lines are straightforward – you just follow the money. But this case is different. Nearly all Democrats and most Republicans favor granting the renewable energy tax extensions. The battle is over how to pay for them, but is it a battle worth fighting at this point? After all, Democrats are likely to control Washington DC next year, at which point they can pass all the new taxes on Big Oil they want. Why kick the renewable industry in the groin in order to make a political point that no one really cares about?
Part of the problem is that public awareness of the issue is low. The renewable energy industry and environmental groups have not complained about the Democrats’ behavior because they don’t want to anger the Democratic leadership. That could be a big mistake. By not calling the Democrats on their election year posturing over deficit spending, they risk handing the issue to Republicans who will now be in a position to blame Democrats for slowing growth in wind and solar power.
Scott Sklar said that the only way to break through what he called “the silly season,” is for voters to pay attention and get indignant. Sklar said, “This is what people don’t understand. Projects are being cancelled now because Congress doesn’t have its act together, and it’s the biggest projects – the ones that reduce tons of carbon dioxide and employ thousands of people. In an economic downturn in the United States, people are going to lose their jobs in clean energy and there’s absolutely no reason for it.”
If jobs and the economy are not enough to make you indignant, just remember those global warming tipping points.
Kelpie Wilson is a freelance writer covering energy and environmental issues. She is a contributing editor for Yoga Plus magazine and author of Primal Tears, a novel. An archive of her past articles is on her website.