In an era where the essence of fiscal conservatism is wrapped around tax cuts and tax breaks, one would be hard pressed to gain any support from the right wing when the words “more taxes” are involved. And yet it seems that the very people who live by the tax cut and die by the tax cut have found their breaking point: renewable energy.
The fact that the wind energy production tax credit, or PTC, is set to expire at the end of the year may be news to some. The PTC was originally signed into law in 1992 in order to support renewable energy and harness the positive externalities that it produces, including its environmental, economic and energy security benefits. Since 1980 the cost of producing wind energy has dropped by 90 percent. The wind industry was responsible for about 85,000 jobs as of 2009. A report by the Department of Energy found that not only can the United States reach 20 percent wind energy by 2030, but that by 2030 the industry could support roughly 500,000 jobs in the United States and bring in more than $1.5 billion in property tax revenues annually.
So why are Republicans so anxious to let this tax credit expire, and why is this so important for Maine? The answer to the first question is very simple: bipartisanship. Republican opposition towards renewable energy (and support for oil and gas) clearly overpowers its support for tax credits. While we are on the topic of hypocrisy, let us look at one statement made by a coalition of 64 groups expressing strong opposition to the wind energy PTC: “It is time to end special tax provisions that distort the energy market and increase energy prices.” Of course the word “distortion” that they speak of would be considered competition in any other scenario, and the “increasing energy prices” would simply be an industry working towards becoming an economy of scale. It is important to note that fossil fuels subsidies are nearing $1 trillion per year, while the cost of the wind energy PTC costs $5 billion per year (ironically the same amount of money that leaves the state of Maine every year due to its dependence on oil).
So where does Maine come into the picture? Maine is on the brink of becoming one of the prominent faces of the wind industry. The potential for offshore wind energy in Maine has caught the attention of Statoil North America — the first company in the world to deploy a full-scale floating wind turbine. Statoil is ready to build a 12-megawatt wind farm off the coast of Maine. While 12 megawatts is not going to solve Maine’s dependence on oil, it is a necessary step in order to commercialize wind energy and drive the costs of energy down.
Ken Fletcher, the director of the Maine Energy Office, is skeptical about the high costs of wind energy. “I know pilot project costs are higher,” he said about the Statoil project, “but if you’re asking Maine ratepayers to pay $10 million per year, we need to see that we’re going to get a reasonable return on the investment.” For the sake of reality, let us bring the cost of this pilot project down to a personal level: 73 cents per month per person — just over a tenth of a penny per kilowatt hour. While assumptions are never safe to make, it a safe bet that the average Maine resident would be willing to trade a cup of coffee once a month in order to see a source of energy that is pollution-free and also a strong combatant against climate change. Sacrificing one cup of coffee a month so that our children and grandchildren can drink their coffee stress-free does not sound like too much to “shoulder.” It sounds like an investment.
It is important to recognize that every industry needs someone to invest in it. Providing a tax break to an industry that, in turn, can provide us with a break that cannot even be measured in dollars should be a nonpartisan no-brainer. Today politicians seem to care more about treating party lines like enemy lines than getting down to business and helping America move forward. This country needs leaders who are willing to get their hands dirty in order to get us clean energy.
Braden Sinclair is a second-year economics and political science major at the University of Maine. He currently resides in Eddington.
Wind energy is an expensive, tax-subsidized boondoggle enjoyed by crony-fascism mixing government power with private interests. Ranting at “the right wing” and “tax cuts” doesn’t change that.
The ‘essence’ of fiscal conservatism towards business is letting businesses sink or swim on their own, not subsidies. Those which need subsidies are those which the business world has already deemed to be unprofitable for the foreseeable future. It is very possible that Maine needs a more forward-thinking business class than it has, but supplementing it with politicians ‘playing visionary’ is unlikely to produce much except a public with warm, wet backs and the impression it’s raining.
What in the world are you talking about!
Oil is still has many forms of subsidies!
Don’t you think it’s time to take OFF the training Wheels!
Not taxing it more than it already is in a drive for higher taxes is not a “subsidy”. Every business has business deductions from gross income that is not taxed as the income it is not. That is not the same as the subsidy of negative taxes in the form of credits simply for being in a politically favored business. Taxes on oil are higher than oil companies’ net profits.
Exon paid Zero taxes last year! Look it up!
Look it up and you can find anything you want supporting leftist myths, but it isn’t true. Exxon-Mobile received a refund on its 2010 US Federal income taxes for an enormous overpayment in 2009. It pays tens of billions in taxes world wide. It did not pay “zero taxes” last year or any year.
Keep in mind that conservatives aren’t Republicans, who are often all too willing to do a favor for their friends in business. If you can point out an actual subsidy to the oil business, I’m sure conservatives would decry it.
The TVA was controversial in its day due to government involvement!
It turned out to be a great public investment!
The TVA is a wholly government-owned corporation designed to provide the public with various services, not a subsidized, privately held, profit-making one.
TVA used eminent domain to displace about 50,000 people and was intended to replace the possibility of private utilities in accordance with the surge in socialist and fascist ideology of the 1930s. Of course it was “controversial”, and still should be for anyone paying attention to the history instead of uncritically accepting the “new normal”.
True enough. My point was that it in no way set a precedent for subsidizing for-profit companies. Dlbrt would have been better off citing the Pacific Railway Acts, which did do so and did result in a useful expansion of transportation. But success in one case doesn’t mean success in another and the history of government subsidies to industry is, er, mixed. Especially recently.
There have been improper subsidies to businesses, but allowing a railroad to establish ownership of previously unowned land along the right of way it developed wasn’t one of them. Since that time progressives, beginning in the late 19 the century, reversed that policy on behalf of their statism, preventing almost all development and settlement of unowned land, as private property, in order to build an empire of permanently government-owned land through most of the west. There is no excuse for dismissing “controversial” government action imposing forced sacrifice for “the public good”, to be regarded as now vindicated, only because the victims are long forgotten and we are now supposed to accept collectivism and statism as normal. They use the same bogus arguments in their campaign to destroy private property in Maine through their Federal park takeover agenda.
For the amount of money we have wasted on wind energy we could have built hydro dams that would produce clean, reliable, cheap hydro power. It would have been like giving every Maine household a tax free check for $30 a month. Unfortunately those promoting the wind industry are either useful idiots or those who wish to depopulate the state. Cheaper energy is the last thing either group is interested in.
Ten Four oldmainer!
Hydro is emissions free ,steady and reliable!
If Sinclair was an engineer, she would know better than to write such empty-headed nonsense. How unfortunate that UMO is producing Krugmanesque pratts who feel the need to opine before they’ve actually learned anything. Or accomplished anything. Or substantively contributed to the bureaucracy of the collective,
Political majors don’t have to know anything. Ranting against “the right” and fuming at support of “tax cuts”, echoing everything they hear around them, is deemed to be enough in the demands for more government social controls and manipulation of the economy.
Nothing stops any company from putting up as many wind turbines
as they want. Other than there is no
profit in it. If the people of Maine
want to pay for the turbines that is their choice, no one is saying they can’t. But other ratepayers/taxpayers are being
asked to help foot the cost and that is where the controversy begins.
Well said. Like with anything in life you can have whatever YOU are willing to pay for. As soon as YOU want MY money to pay for it then we have problems.
Braden, you’re entitled to an opinion but not to your own facts. It’s evident you do not understand how costly the PTC is, the tax policies governing oil/gas or the true cost of wind power nor do you appear to understand the electricity market in New England. Is this the best U of Maine offers? Activists without a clue?
If one looks up his Facebook page, they will see he is with the grant seeking PTC subsidizing
AEWC Advanced Structures and Composites Center.
Wind energy is NOT a combatant against climate change and is NOT clean..please do yourself a favor and rent the movie WINDFALL..know something about what you are talking about before making assumptions you have been told by propagandists.
and destroying the eco balance will not help the environmental issues either..WHY are we NOT thinking of the obvious already PROVEN (no – the studies by wind companies do not count) mal-effects of huge wind turbines worldwide? THESE ARE INDUSTRIAL MACHINES NOT WIND MILLS>
SPEND YOUR OWN MONEY on this useless nonsense, not mine.
WELL THEN, YOU PAY FOR THE FECKLESS Wind FARCE MY ECONOMICS FRIEND(not the US tax payer)!
—and we all know the value and capacity factor of economics majors These days as well, especially when doing a cost benefit analysis on this issue( which they refuse to or do not know how to do).
Capacity factor of on demand wind= zero!
Economics major opinion worth on this issue = ZERO
He’s an Economics major but his Facebook page puts him in Professor Unicorn’s (Habib Dagher’s)
AEWC Advanced Structures and Composites Center.
Why no disclosure?
Dense energy sources are needed to power modernity.
How does wind meet the criteria every electrical generating source must meet Mr. Sinclair??
Any electric utility must meet the following, well known in the industry to survive.
Defying the laws of thermodynamics , along with the religious fervor of the climate computerized theories that defy reality do not cut it anymore
Dense energy sources are needed to power modernity.
How does wind meet the criteria every electrical generating source must meet?
Any electric utility must meet the following, well known in the industry to survive.
1.The source must provide large amounts of electrons (it must be dense)
2.The power must be reliable and predictable.
3.The electrons must be dispatchable (high or low amount must be generated on demand)
4.It must serve one or more grid demand elements(base load, load following and peak load).
5.The utilization of environment must be minimal and compactness is a must, or it is non-green and damaging the environment.
6.It must be economical
Mr Sinclair, address the above please.
Dense sources of electron production support modernity.
Sorry, the consumer can’t and won’t buy the economics you present, because they know how to balance a check book!Do you?
This is an example of what passes for a college education today. Critical thinking? Logical analysis of facts? Economics?
What might be of most concern is that a University of Maine professor still seems to believe that wind power development at some level is going to end Maine’s use of oil and be a major player in the climate change story. He’s an economist – a numbers guy – I’d like for him to show us THOSE numbers. Can he? Can anybody? No one at the U of M seems willing to disclose those numbers.
If offshore wind is a smart move, then let’s let the research take us there and tell us that. The industry and its supporters want us to commit our future to them before we’ve even done the research or determined the true costs.Mr. Sinclair says that giving the wind industry continued taxpayer support (they’ve already had 20 years of the Production Tax Credit) should be a “no-brainer.” I believe ethanol was supposed to be a no-brainer too. Can you find anyone not in the ethanol industry who still thinks THAT was a good idea?
I’m heartened by sophomoric commentary–the writer is a sophomore; since it reveals that at least one U. Maine student is interested in more than investing in foreign athletes and national drinking contests.
Facts elude him, as they do all sophomores whose knowledge base is as thin as first ice.
Perhaps the most elusive fact is that Statoil is seeking either 29 cents/Kw or 32 cents/Kw from the PUC as the price of their off shore electricity. Put into context, Vermont has a long term contract with Hydro Quebec for 6 Cents/Kw for 20 years and Gov. LePage is negotiating with them for an even better deal!
….and we haven’t even factored in the cost of distribution, environmental and fishery impact of the restricted leasehold for a floating platform.
Another fact he missed is the est. 25% higher cost of Operating and Maintaining(O&M) these floating platforms and the impact of all the boat traffic and onshore facilities.
Nor does he mention that this is ‘wind’ and the power fluctuates from nothing to ‘too much’; making it a headache for grid managers who must back-fill with conventional power supplies. The dirty secret about German off shore wind farms is that they have created a resurgence in coal fired generation plants; and in the U.S. a similar growth in gas fired plants.
He also forgot that Wind Turbines require electricity to operate, and that has to be purchased. Sounds Ironic, but wind farms have electric bills just like the rest of us.
Most sophmoric of all, are his ‘de minimis ‘ arguments of ‘ it’s only a fraction of penny more…uh huh. Perhaps he’s never heard of the ‘straw that broke the taxpayer’s back’, but then again the elite 1% never do.