The February 24 piece in The Hill “What do we have to show for government subsidies of wind power?” by Randy Simmons, a Charles G. Koch Professor of Political Economy at Utah State, was riddled with factual errors that are a disservice to the readers.
First, the piece is premised in part on the misleading claim that wind energy provides only 1.6 percent of U.S. energy. The author cleverly includes transportation fuels to make wind’s contribution appear less than it is. Wind energy actually represents nearly 5 percent of our nation’s electricity supply, with higher percentages in 17 states. Iowa and North Dakota get more than 25 percent of their electricity from wind.
{mosads}Simmons also grossly overstates the cost of the wind energy production tax credit (PTC), claiming that its cost to the government in reduced revenue is “at least $12 billion annually.” Historically the cost of the PTC has never exceeded $1.4 billion and estimates from The Joint Committee on Taxation for a long-term extension put the annual cost of extending it at between $1.3 and $2.4 billion. Maybe Professor Simmons put his decimal in the wrong place.
Perhaps even more problematic than his numerical errors are his omissions. Simmons ridicules wind energy as a “fledgling industry” that only exists because of the PTC, which he dubs a “government crutch.” Yet he is totally silent on the plethora of permanent tax credits and other goodies that go exclusively to competing fossil fuels.
The Joint Committee on Taxation estimates the cost of tax advantages exclusively doled out oil, gas and coal at $21.8 billion over the next five years. Don’t those tax breaks represent a government crutch too? Why not call out those subsidies? Are they “propping up” fossil fuel industries, or are they just helping to boost profits?
In his op-ed Simmons labels a proposal to make the wind PTC permanent “an endless welfare system,” but isn’t that label more appropriately applied to the fossil fuel breaks, some of which have been entrenched in our tax code for the better part of a century?
Professor Simmons is arguing that wind energy is a bust unless it can compete without a tax incentive, but he is apparently fine with long established competing fuel stocks benefiting from greater and more permanent government handouts. How does that make sense? It doesn’t, unless perhaps your position is funded by the Charles G. Koch Foundation.
As for the question “What do we have to show for government subsidies of wind power,” the answer is quite a lot—especially if you are a patriotic American who likes lower electricity bills.
The wind energy PTC has allowed wind energy to compete on a playing field long tilted by exclusive tax breaks for fossil fuels. The resulting growth in wind power provides Americans with numerous benefits.
Wind energy diversifies our energy mix with a clean domestic fuel source that cannot dry up. It is virtually immune to price shocks from events and market conditions in other parts of the world. Just as it is smart to diversify one’s financial portfolio, it is smart for our nation to diversify its energy mix.
Not only does wind power help keep electricity rates more stable, it is currently saving Americans money on their monthly power bill. As wind energy is added onto the power system through fixed-rate contracts, it shields consumers from the inherent price variability of fossil fuels.
Wind energy projects also deliver roughly $180 million in lease payments to private landowners each year; that generates valuable tax revenue which can be reinvested to upgrade roads, schools, and emergency services in rural America.
The role wind energy can play in helping address climate change and other pollution problems—such as mercury in the fish we eat—should not be overlooked either. As we get more electricity from wind, our need to burn coal is reduced, resulting in less greenhouse gas and mercury emissions.
The Department of Energy’s soon to be released “Wind Vision” report showing that wind can provide 20 percent of our nation’s electricity by 2030, which draws similar conclusions as an earlier version completed by the George W. Bush Administration, is no doubt what prompted Professor Simmons’ rant against wind energy. And while he wants the reader to believe reaching that goal is a pipedream, his shrill attack indicates otherwise—and so do the facts.
Jenkins is president of Conservatives for Responsible Stewardship.