Pro-Fossil-Fuel Front Groups Attempt – and Fail – to Answer Our Questions on the Wind PTC

Posted By Lowell F. on January 4th, 2013

Congress has now passed an extension of the wind Production Tax Credit (PTC), as part of the “fiscal cliff” resolution earlier this week. For those of us who strongly support the expansion of wind energy in this country, extension of the PTC was clearly the right thing for Congress to do. For those opposed to clean energy, however, it was a big mistake.

Take, for instance the pro-fossil-fuel, anti-clean-energy groups (the American Energy Alliance, American Conservative Union, Competitive Enterprise Institute, Heritage Action for America, American Commitment, and Freedom Action) who signed onto this letter to Congress in mid-December 2012, urging Congress’ “opposition to extending the wind [PTC].” Their reasoning, if one can call it that, was that “corporate dependence on federal subsidies not only harms the taxpayers who finance the PTC, it also creates an improper incentive for wind companies to focus on obtaining lucrative subsidies rather than long-term sustainability and competitiveness.” The (apparently unintentional) irony here is mind-boggling, given that the fossil fuel corporations have received massive federal subsidies that have harmed taxpayers and created improper incentives for those companies for many decades now. Apparently, it’s “do as we say, not as we do,” with the fossil fuel industry.

Anyway, I decided to check in with the pro-fossil-fuel organizations signing the letter to Congress to get a better idea as to their thinking on this matter. For one, I wanted to better understand the part of their argument for deep-sixing the PTC relating to state Renewable Energy Standards (RES). According to these groups, the state RES’s already give wind, solar, etc. enough help, meaning they don’t need the PTC.  At the same time, though, it appears that most if not all these groups also oppose state RES’s. That seems like an internal contradiction in logic. Second, I hoped to pin these groups down on whether their expressed dedication to “free market principles” meant that they would also support getting rid of all taxpayer-funded corporate welfare to fossil fuel interests.

I emailed and/or called all the organizations with contact information, multiple times in several cases. In the end, I only heard back from two of them – American Commitment (via email) and American Energy Alliance (phone conversation). The rest apparently would rather not elaborate on their “reasoning” regarding the PTC and RES’s.  As for American Commitment, I’m not sure their response really helps matters, but for the record here it is.

Yes, we’re against state mandates and the PTC. The point of the letter is that even supporters of mandates should oppose the PTC as it is presently structured because it causes negative pricing incidents. When the ethanol subsidy was repealed a couple years ago, cooperation between supporters and opponents of the mandate was critical. We look to repeat that success here…[In response to a followup question about eliminating fossil fuel subsidies] We support the Pompeo bill to end all energy subsidies with an offsetting cut to the corporate tax.

The problem, of course, is that the Pompeo bill is very weak, cutting only a few dirty energy welfare forms (basically the ones that aren’t used), while letting all the other corporate welfare for the fossil fuel industry stand. I pressed American Commitment further on this issue, and specifically on whether they’d be willing to go further and demand elimination to ALL corporate welfare to fossil fuel interests, but they didn’t respond.  Sadly, that’s not in the least bit surprising.

I also managed to get a human being on the phone at the American Energy Alliance (AEA) – their Communications Director, Benjamin Cole.  According to Mr. Cole, who was very pleasant and polite – although also clearly a “true believer” (e.g., that fossil fuels are the only serious form of energy, and that renewable energy is a boondoggle) – the AEA is a “free market organization” which opposes “all forms of energy mandates and subsidies.” According to Mr. Cole, the Obama administration has “taken a punitive and discriminatory [stance] against fossil fuels,” the goal of which has been to “punish” the fossil fuel industries and to “make them more expensive.” Of course, the reality is almost the complete opposite, as U.S. oil and  natural gas production have increased significantly since 2008, while natural gas prices have plummeted.  Apparently, AEA’s attitude is not to let facts get in the way of their story. As for AEA’s opposition to both the wind PTC and the state RES’s, Mr. Cole basically stuck to the “we are a free market organization” line, and left it at that.

I attempted to press Mr. Cole as to whether AEA’s espoused opposition to government distortions to free markets meant that AEA also would support getting rid of government subsidies to fossil fuel companies. Cole pointed to the Pompeo legislation, which as we mentioned above is very weak. Here’s the American Wind Energy Association’s analysis:

The call for an end to all energy subsidies from Congressmen Mike Pompeo (R-Kans.) and Raul Labrador (R-Idaho) could be a laudable goal if it treated all energy resources fairly and treated energy fairly relative to other sectors. Unfortunately, their proposed legislation doesn’t work that way. It unfairly singles out wind power, the most promising source of new American manufacturing jobs, while protecting billions of dollars in incentives for other energy sources and all non-energy sectors. Honest reform of tax incentives must start with a level playing field.  The Pompeo-Ladrador proposal fails to do that.

So much for the Pompeo legislation, in other words. Meanwhile, AEA’s Benjamin Cole also asserted that pro-clean-energy Rep. Ed Markey had joined with Rep. Pompeo in a letter on this subject, but the only thing I could find was Markey’s challenge to Pompeo and other wind PTC opponents to “also support the elimination of billions of dollars in tax subsidies and loans to oil, coal, and nuclear companies.”

In the end, when I continued pressing Mr. Cole on whether AEA would support elimination of fossil fuel subsidies, he basically avoided a direct answer to the question. Instead, he went to the standard pro-fossil-fuel, anti-clean-energy talking points about the need for “energy-dense, affordable, reliable” fuel sources. Clearly, in AEA’s opinion, the only fuels that fit those descriptions – or ever will, apparently are fossil fuels.

And thus the fossil fuel supporters’ “reasoning” follows its circular, dizzying path: a) fossil fuels are inherently superior energy sources, ones which the “free market” would obviously choose over supposedly inferior renewable energy sources; b) renewable energy sources are not up to snuff and therefore don’t deserve to be subsidized; and c) given all that, fossil fuels clearly deserve the support they receive, while renewables clearly do not deserve support (or even a level playing field with fossil fuels). Make sense? No, I didn’t think so, but that’s the absurd argument the fossil fuel industry and its bought-and-paid-for “think tanks” are busy pushing.

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