President Obama likes to talk about making sure “the biggest corporations pay their fair share.” Treasury secretary Tim Geithner calls for tax reform to close loopholes and subsidies. Budget hawks say federal spending must be curbed. Congress and federal environmental regulators claim they are doing everything they can to save endangered species. By doing nothing and waiting for December 31 to pass, all of those folks could strike a blow in support of each of these policies. All they have to do is let the federal production tax credit (PTC) for wind energy expire on schedule this coming Monday.
Begun 20 years ago to spur the construction of wind-energy facilities that could compete with conventional fossil-fuel power plants, the tax credit gives wind an advantage over all other energy producers. But it has mostly benefited conventional nuclear and fossil-fuel-fired electricity producers. The biggest user of the tax credit is Florida-based NextEra Energy, the nation’s eighth-largest power producer. Through skillful manipulation of the credits, NextEra from 2005 to 2009 “paid just $88 million in taxes on earnings of nearly $7 billion,” Businessweek reports. That’s a tax rate of just 1.25 percent over that period, when the statutory rate is 35 percent.
Wind power has had two decades to prove itself with federal subsidies. Last year, wind power represented a third of all new electric-generating capacity, because taxpayers foot the bill for more than half of wind power’s cost. In addition, lobbyists for wind power have convinced 30 states to set mandates requiring that a certain percentage of electricity come from renewable sources – which guarantees the wind industry a market.
The subsidies directed toward wind dwarf the subsidies of other energy sectors. Robert Bryce, energy analyst for the Manhattan Institute and an NRO contributor, reports that subsidies to wind are “at least twelve times greater than those provided to the oil and gas sector and 6.5 times greater than those provided to the nuclear industry,” on a per-unit-of-energy-produced basis.
But no matter how much money is blown its way, wind power – for simple scientific reasons – can’t graduate to the kind of large-scale, reliable energy production that its backers tout. Physicist and environmentalist John Droz Jr. notes: “There is no real environmental benefit to wind, because a) it’s an unpredictable commodity, b) output from any group of wind projects can and will go to zero on many occasions, and c) energy generated from industrial wind power cannot be economically stored.” Germany, which has gone stark raving mad in building wind turbines, has proven just how unreliable it is. On one day this February, wind power delivered a third of Germany’s electricity needs, but four days later, on a still day, it contributed precisely zero.
Then there is the carnage inflicted on Mother Nature. Paul Driessen reported in the Washington Times that “the U.S. Fish and Wildlife Service estimates that wind turbines kill 440,000 bald and golden eagles, hawks, falcons, owls, cranes, egrets, geese, and other birds every year in the U.S., along with countless insect-eating bats.” The actual numbers are probably far higher. The turbine blades of the nation’s 39,000 windmills move at 100 to 200 miles per hour and can mow down anything that gets in their path.
Over the past 25 years, an estimated 2,300 golden eagles have been killed by turbines at Altamont Pass, Calif., alone, leading to an 80 percent drop in the golden-eagle population of southern California.
Sadly, many Republicans have climbed on board the carnival train for wind fans. Karl Rove continued the former Bush administration’s defense of the federal wind tax credit at this year’s American Wind Energy Association convention. He was joined on stage by former Obama White House press secretary Robert Gibbs. Three leading Senate Republicans – Charles Grassley of Iowa, Lisa Murkowski of Alaska, and Pat Roberts of Kansas – were furious last August after Mitt Romney came out in favor of ending federal largesse for wind energy. All three senators oppose even the most modest of cuts in the PTC.
Supporters of wind may get their way in any last-minute budget deal to avoid the “fiscal cliff,” when a bipartisan group in Congress might huddle with the Obama administration and insist that an extension of the PTC be included before it expires on December 31 or immediately afterward.
The same moans and predictions of doom made the rounds last year when the corn-ethanol industry tried to save its federal subsidy, despite evidence it was ripping off taxpayers and causing environmental damage. In the end, the subsidy ended and none of the dire consequences predicted by its demise have occurred.
It’s time we cut the financial umbilical cord that connects taxpayers to wind turbines. If wind can’t compete with other forms of energy after 20 years of dependency, it should be forced, like a young adult that doesn’t want to leave home, to strike out on its own.
— John Fund is national-affairs columnist for NRO.