An interesting article appeared in this paper last week on production taxes collected by the state on wind energy. It reported $3.7 million was collected by the state in 2015, down from $4.4 million collected in 2014.
The article demonstrated how the current taxes collected on renewable energy have no capacity to offset declines in taxes collected on oil, gas and coal. Many in our country, led by President Barack Obama, naively dream of a day when renewable energy will take the place of our stalwarts, oil, gas and coal. For Wyoming, we all need to realize the $3.7 million collected in production taxes for wind in 2015 compares to $600 million collected on oil and gas and $300 million on coal in 2013. An accurate comment in the article was made by UW economist Rod Godby: “This revenue stream is small.” What a revelation.
To put the $3.7 million production tax collected on all wind energy in the state in 2015 into perspective, that same amount of production tax would be collected on about 4,500 barrels of oil per day with prices at $40 per barrel. Three good oil wells in Converse County can produce that much. Three wells!
There is no doubt about it – wind energy is enjoying great support thanks to voters in California and Oregon who have voted to rapidly convert their electric power supply in future years to consist of 30 percent of their total capacity. Current renewable energy numbers amount to only low single digits of our electric supply. I respect the will of the voters in these states as long as their desires include taking the full responsibility of the cost of their choice in electricity.
We are seeing firsthand how renewable energy, especially wind power, receives a pass by most regulatory agencies. Thanks to the president’s instructions, federal agencies are processing wind farms at record speed. This fast-track analysis does not sit well with those like me in the oil and gas industry. I participated in an environmental impact statement for oil and gas wells near Rawlins that took the BLM six years. Whereas a similar environmental review for 1,000 wind turbines known as the Chokecherry Sierra Madre Project, owned by a financial supporter of Obama, took only 18 months for BLM to complete. Even more disappointing were the groups that appealed our project for sage grouse, raptors, view shed and historic trails that are mysteriously silent on the wind project in the same area. This despite the fact wind turbines are white, seen from as far away as 30 miles during the day and have blinking red lights at night, not camouflaged like oil and gas facilities.
What does the decline in oil, gas and coal and the proliferation of wind farms mean for Wyoming? We will endure an erosion of our view shed and wildlife for the benefit of other states with little compensation for Wyoming citizens. We must ask our leaders in both the legislative and executive branches of state government to protect our state and its citizens.
The measures that should be considered are that Wyoming must demand and receive any federal carbon credit associated with the installation and use of renewable energy sources. Currently, the state where the wind-powered electricity is used enjoys that benefit. Second, we must impose a production tax on wind that replicates declines from traditional sources of oil, gas and coal. Third, our Public Service Commission and DEQ should be directed to deny any permits for new wind farms unless corresponding increases in rates due to costs associated with the construction and operation of the wind farms and transmission lines will be directed to rate payers in those states that voted for the renewable power supply. I am sure this measure will not meet with the acceptance of one of our electrical supply companies, which is owned by another financial supporter of Obama.
If supporters of renewable energy accept these conditions, then their projects should receive state approval. If not, they should consider constructing their projects in other states. I am not against new energy sources. Demand is increasing. Our country depends on cheap, reliable and a constant delivery of electricity. Computers needed for everything from national security, military to medical and household appliances depend on a constant electrical current. I am just suggesting those who want renewable energy pay for it.
Wyoming leaders have to be creative if we intend to survive efforts to convert our nation to renewable energy and destroy oil, gas and coal. We cannot be as hypocritical as the article by a retired professor telling us about climate change and extolling the virtues of getting rid of carbon while he lives comfortably on his state retirement funded in large part by the very carbon he hates.
Steve Degenfelder is a certified professional landman living in Casper who has worked for various oil and gas companies over the past 35 years.
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