How Many Distortions Can a Wind Lobbyist Cram into One Talking Point?

by William Yeatman on June 2, 2011

in Blog

Post image for How Many Distortions Can a Wind Lobbyist Cram into One Talking Point?

The answer is three, the same number of licks it takes an owl to reach the center of a Tootsie Pop.

American Wind Energy Association CEO Denise Bode recently appeared on Fox Business News to promote wind power. At the 6:45 mark of her segment, she defended wind energy subsidies with a flurry of misinformation and wishful thinking. Here’s the exchange,

Fox Business News Question: “If wind truly is cracked up to be the way you say it is, why do we have to subsidize it? Why can’t private markets fund this, and immediately have it be profitable?

Denise Bode Answer: “Let me tell you, this is a great deal. We have one tax incentive that supports wind*, and it’s allowed to expire every other year. The fossil fuel industry has had those tax subsidies that are 5 times more**, and they are permanent. What we’re saying, is if you help us get up to scale, by making it a long term policy, or, if you want to take away all [subsidies], on both sides, we will compete***, but you can’t do both. You can’t just talk about wind subsidies, and not also talk about fossil fuel subsidies.”

Fact Check

*For starters, it’s not true that wind enjoys only “one tax incentive.” The Energy Improvement and Extension Act of 2008 created an investment tax credit for purchasers of small-scale wind turbines. Moreover, there are many types of subsidies in addition to “tax incentives.” Thanks to the Stimulus, for example, utility-scale wind projects that break ground by December are eligible for a direct grant from the Treasury Department for up to 30 percent of capital costs. And the wind energy industry is also a major beneficiary of loan guarantees through the Department of Energy Loan Programs Office. Most importantly, 31 States and the District of Columbia, representing more than 70 percent of the U.S. population, have enacted green energy production quotas, known as renewable electricity standards, that force utilities to buy green energy.  As wind energy is the most mature renewable energy industry, it is the most economic way to meet these renewable electricity mandates. Therefore, an enormous demand for wind energy is guaranteed by law. So why must the taxpayer also subsidize its supply?

**It’s also not true that “fossil fuel subsidies…are 5 times more” generous than wind energy subsidies. According to the Energy Information Agency, wind is subsidized about $23 per megawatt hour, while coal is subsidized about 40 cents a megawatt hour.

***Are you kidding me? Oh Lord, how I wish the Congress would test Ms. Bode’s contention that unreliable, expensive wind energy can compete with reliable, affordable conventional energy, on a level playing field. In fact, conventional electricity generation, like coal and natural gas, exists because utilities want to buy it, while renewable electricity generation, like wind and solar, exists only by the grace of political favoritism. Absent taxpayer give-aways, there would be no wind industry in America. The same does not hold true for conventional energy.

chris y June 3, 2011 at 8:25 am

Fossil fuels are also a source of tax revenues. What is the equivalent BTU tax applied to wind energy, or any renewable for that matter? Equalizing this anti-subsidy must also be part of leveling the field.

Ronaldo June 3, 2011 at 12:32 pm

Always a problem when the renewable-energy crowd start talking about subsidies. They refer to totals rather than per unit. Per unit, subsidies to renewables dwarf those to fossil fuels by a large margin.

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