Wind Needs Greater Role in Nation’s Energy Policy

Posted April 20, 2008 at 11:00pm

As we strive to meet our national energy needs, we must continue to recognize that rural America has much to offer. Rural states can be at the center of the solution as our national energy policy shifts and adjusts in ways that enhance our national and economic security, that promote both innovation and conservation, and that ultimately will ease the strain on families’ and business owners’ budgets. With the passage of the original renewable fuels

standard in 2005 and the aggressive increase included in last year’s energy bill, we already have taken initial key steps in the right direction, as we seek to take advantage of the contribution agricultural producers in rural states can make to reduce our dependence on foreign oil and overall carbon emissions through an increase in biofuels production. Although we are only in the beginning stages of developing biofuels as a reliable domestic source of energy, we must simultaneously look for ways to diversify our nation’s energy portfolio by encouraging the development and investment needed to harness another one of rural America’s most important and valuable, yet underdeveloped assets: wind.

To vastly increase the role that wind plays in our nation’s energy policy, Congress must act this year to provide wind energy entrepreneurs and developers with the incentives and certainty they need to invest in this promising industry that holds tremendous potential for our nation. Along with many of my colleagues, I am disappointed that we have not yet enacted an extension of a popular and common-sense renewable energy production tax credit that would, among other positive advances in our nation’s energy policy, encourage more substantial and timely development of wind energy. The renewable energy production tax credit has been allowed to expire repeatedly in recent years, each time inflicting tremendous damage and delays because of economic uncertainty surrounding efforts to expand wind energy development. We simply can’t keep allowing this industry to develop in fits and starts.

In the 110th Congress, the House has twice passed a multiyear extension of the renewable energy production tax credit and fully paid for the extension by curbing certain subsidies for the largest oil companies. The first attempt was in late 2007 as part of the House-passed energy bill. However, because of objections from the administration and Senate Republicans who did not support repealing any subsidies for oil companies, the tax package fell one vote short of consideration in the Senate and was eventually stripped from the final bill. The House again passed the paid-for version of the renewable energy production tax credits in February as a stand-alone piece of legislation. But with the easy passage in the Senate earlier this month of an amendment by Sens. Maria Cantwell (D-Wash.) and John Ensign (R-Nev.) providing for a one-year extension of the tax credits without a pay-for, it appears that the House and Senate have yet to find a way out of the impasse.

With families paying skyrocketing prices at the pump and our addiction to oil a national security issue, it simply doesn’t make sense to continue to give away billions in taxpayer subsidized handouts to big oil companies who are posting record profits. At some point in time, we must refocus our energy investments, jobs and infrastructure here at home. Passing the fully paid House version of the renewable energy production tax credit legislation would mark an important shift in our domestic energy policy by freezing increases of certain tax breaks for large oil companies and reinvesting those resources in renewable homegrown energy like wind. Given the disappointing testimony recently provided by oil executives to Congress and the continued strain on our nation’s economic well-being, I am hopeful that the leadership in the Senate will reconsider the paid-for House version of the renewable energy production tax credit package and garner enough votes for passage.

Looking ahead, we need to involve every community willing and able to contribute to our new energy economy, including Native American tribes. As tax-exempt organizations, tribes cannot take the tax credit or use the full value of the tax credit when joint venturing with a taxable entity. This aspect of the law provides a disincentive for non-tribal companies to invest in renewable energy projects on tribal lands because they can only take a portion of the production tax credit related to their stake in the project. Even as tribes are seeking capital to fund renewable energy projects on tribal lands, non-tribal companies are facing this financial disincentive for investment. That is why Congress should act on Rep. Raúl Grijalva’s (D-Ariz.) legislation, H.R. 1954, and Sen. Tim Johnson’s (D-S.D.) companion bill, S. 2520. By allowing tribes to transfer the credit for electricity produced from renewable resources, this legislation would remove the disincentive that exists under current law for such ventures. By facilitating and encouraging such investment, we would not only support tribal communities in many rural areas, but also harness an abundant renewable resource to reduce our overall carbon emissions.

A shift in priorities is needed to demonstrate a real commitment to wind energy within our national energy portfolio. In addition to reducing carbon emissions, developing our wind resources will provide a tremendous economic driver for our nation’s rural areas and overall economy. Given the irrefutable benefits a robust wind industry would provide our country in meeting its goal of energy security, I am hopeful that we will be successful in enacting these important policies yet this year.

Rep. Stephanie Herseth Sandlin (D-S.D.) is a member of the Energy Independence and Global Warming Committee.