Proposal would end wind subsidy early and authorize the $8.1 billion savings for Office of Science
Posted on July 12, 2016
WASHINGTON, July 12, 2016 – U.S. Sen. Lamar Alexander (R-Tenn.) today introduced legislation that would increase authorized funding levels for basic energy research at the Department of Energy’s Office of Science and end the “wasteful” wind production tax credit sooner, instead of Dec. 31, 2019. Funding for the Office of Science, which is subject to annual appropriations by Congress, could be increased by using the $8.1 billion in savings achieved by ending the wind subsidy two years sooner.
Alexander says the legislation would help the U.S. keep its lead in clean energy innovation by increasing what it does “better than any other country, by far” – basic research. Alexander said the U.S. is already researching ways to regrow human hearts from adult stem cells and build artificial organs, and the benefits of increasing basic energy research are “just as remarkable.”
“The U.S. does many things well, but one thing we do better than any other country, by far, is basic research. But the problem we have with increasing basic energy research is finding a way to pay for it. I am here today to introduce legislation that finds a way to pay for it—by ending the 24-year-old wind production tax credit at the end of this year, rather than in 2019,” Alexander said. “For years, we have been gradually ending the wind production tax credit while continuing to make taxpayers subsidize a mature industry – this bill would simply end it sooner. Then we can use the $8.1 billion in savings to pay for the kind of basic energy research that drove our natural gas boom, and will provide the next generation of energy innovations that will mean cleaner, cheaper, and more reliable energy.”
The bill would end the renewable electricity production tax credit for wind on Jan. 1, 2017, and authorize more funding for basic energy research at the Department of Energy’s Office of Science.
Alexander has opposed efforts to extend the wind production tax credit since he joined the Senate.
Sen. Alexander’s full as-prepared floor remarks follow:
I’m here today to talk about the importance of doubling funding for basic energy research and making $8.1 billion available in the federal budget to pay for it.
The U.S. does many things well, but one thing we do better than any other country in the world is innovation through basic research. I’ve been talking a lot this year about biomedical research. Dr. Francis Collins, the director of the NIH, tells me that in ten years researchers in the U.S. may be rebuilding hearts from adult stem cells, giving patients an artificial pancreas, and vaccinating against HIV/AIDS.
Just as remarkable are the opportunities available in clean energy research – lowering the cost of energy, cleaning the air, improving health, reducing poverty, and helping us deal with climate change. Not just in the United States, but all over the world.
Congress has been focused on this since the 2007 America COMPETES Act that was passed with overwhelming bipartisan support and signed into law by President Bush.
America COMPETES grew out of the “Rising Above the Gathering Storm” report on American competitiveness, written by a committee chaired by Norm Augustine—and the report’s main recommendation was to increase energy research because of the benefits it would provide around the world.
Eight years ago, in a speech at Oak Ridge National Laboratory, I called for a project that would duplicate the urgency of the World War II Manhattan Project and put the United States on a path to clean energy innovation.
I proposed seven “grand challenges”:
- make plug-in electric vehicles commonplace;
- find a way to capture and use carbon;
- help solar become cost-competitive with other forms of energy;
- safely manage nuclear waste;
- encourage cellulosic biofuels to become cost-competitive with gasoline;
- make new buildings green buildings; and
- create energy from fusion.
In eight years, energy researchers have made tremendous progress in these areas. For example, the price of solar panels has fallen over 80 percent since 2008. But, on some of the other challenges, there is still a long way to go. That’s why we ought to keep our focus on making energy research a priority.
The biggest problem we have with increasing basic energy research is finding a way to pay for it.
Today, I am introducing legislation that finds a way to pay for it—by ending the 24-year-old wind production tax credit at the end of this year, rather than in 2019. Instead of slowly allowing the wind production tax credit to phase out, this bill would end it on Jan. 1, 2017.
Then Congress could use the $8.1 billion in savings to increase the funding authorization for the Office of Science for the same kind of basic energy research that drove our natural gas boom and will provide the basis for the next generation of energy innovations that will mean cleaner, cheaper, more reliable energy.
Research at the Office of Science benefits other Department of Energy programs, including advanced nuclear reactor research at the Office of Nuclear Energy and research on carbon capture technology at ARPA-E.
Energy research through the Office of Science, nuclear and fossil energy programs, energy efficiency research and ARPA-E have led to amazing new discoveries. If more funding is available, it could be used to make sure energy research is a priority.
Let’s not continue to give away this money to wind developers, who have been using it to get rich over the last 24 years – often over the objections of communities and towns and homeowners that don’t want their farmland and mountains covered with 45-story turbines with blades as long as a football field.
It’s obvious what Congress ought to do and obvious how we ought to pay for it.
In 2014, taxpayers committed to spend another $6 billion to extend the wind subsidy for one year. That amount is more than the U.S. spends in an entire year on the Office of Science at the Department of Energy. That money could instead help put us on a path to double government funding for basic energy research. Let’s not make that mistake again.
Basic energy research is one of the most important things the country can do to help unleash our free enterprise system to provide the clean, cheap, reliable energy we need to power our 21st-century economy, create good jobs, and keep America competitive in a global economy.
Political scientist Bjorn Lomborg wrote in the Wall Street Journal last month that "the Obama administration’s signature climate policy, the Clean Power Plan… will accomplish almost nothing:
“We should focus more on green-energy research and development, like that promoted by Bill Gates and the Breakthrough Coalition. Mr. Gates has announced that private investors are committing $7 billion for clean energy R&D while the White House will double its annual $5 billion green innovation fund. Sadly, this sorely needed investment is a fraction of the cost of the same administration’s misguided carbon-cut policies.
“Instead of rhetoric and ever-larger subsidies of today’s inefficient green technologies, those who want to combat climate change should focus on dramatically boosting innovation to drive down the cost of future green energy.
“The U.S. has already shown the way. With its relentless pursuit of fracking driving down the cost of natural gas, America has made a momentous switch from coal to gas that has done more to drive down carbon-dioxide emissions than any recent climate policy.”
And in my own conversations with Mr. Gates, he has said that the government should double its $5 billion investment in basic energy research in order to spur real clean energy innovation in the private sector. That research could help develop small modular reactors, which would allow inherently safe nuclear power to be produced with less capital investment and less resulting nuclear waste in more places.
Small modular reactors are one way the country can increase clean, cheap, reliable power. Another way is to continue to develop new advanced reactors and do the research that is necessary to begin the process of extend existing reactor licenses from 60 to 80 years.
Nuclear power now provides 60 percent of our country’s carbon free electricity, which is available 92 percent of the time. Wind, on the other hand, produces 15 percent of our country’s carbon-free electricity, and the wind often blows at night when electricity is not needed.
It’s hard to think of an important technological advancement since World War II that has not involved at least some form of government-sponsored research. Take, for example, our latest energy boom: natural gas.
The development of unconventional gas was enabled in part by 3D mapping at Sandia National Lab in New Mexico and the Department of Energy’s large-scale demonstration project. Then our free enterprise system, and our tradition of private ownership of mineral rights, capitalized on the basic energy research.
Supercomputing, which is part of the Office of Science, is another tool for energy innovation. And supercomputing could do for nuclear power what massive hydraulic fracturing, new mapping tools and horizontal drilling did for natural gas. By the end of next year, we expect the world’s fastest supercomputer will again be in the United States, and once again it will be at Oak Ridge National Laboratory in Tennessee.
That computer will be called Summit, and it will help researchers better understand materials, nuclear power, and basic energy science to drive breakthroughs. Supporting the next generation computers, known as exascale, is also essential to our ability to solve the most complex scientific problems and for both our country’s competitiveness and national security. Exascale computers will be capable of a thousand-fold increase in sustained performance over today’s petascale computers – which have been operating since 2008.
Congress can invest in this kind of innovation, or we can invest in giant wind turbines that produce a puny amount of technology at a great cost to taxpayers.
Some energy developers are reaping the financial benefits provided by the wind production tax credit, which has been in place for 24 years, has provided billions in subsidies to the wind industry, and has been extended 10 different times. The subsidy to Big Wind is so generous that in some markets, wind producers can literally give their electricity away and still make a profit. This phenomenon is called “negative pricing.”
Most of the time, wind power is unreliable and ineffective at meeting the power demands of our industries, our computers, our homes and most everything else we depend upon. Nationwide, wind power is only available about 35 percent of the time, and only 18 percent of the time in Tennessee, while nuclear power is available 92 percent of the time.
Wind is not effective at meeting peak power demands, because the wind mostly blows when demand is low (at night) and does not blow when demand is high (during the day). Wind production tends to peak in the spring and fall, when the need for energy is at its lowest. In fact wind production decreases in the winter and summer when heating and cooling needs can dramatically increase the demand for electricity. And until there’s some way to cost-effectively store wind power, it would be dangerous for a country our size to rely on wind.
Relying on wind when nuclear plants are available is the equivalent of going to war in sailboats when nuclear ships are available. If reliable, cheap and clean electricity is the goal, then four nuclear reactors—each occupying roughly one square mile—would equal the production of a row of 45-story wind turbines strung the entire length of the 2,178-mile Appalachian Trail from Georgia to Maine. Even if you wanted to build all those turbines, you would still need nuclear reactors or gas plants to power your home or business when the wind doesn’t blow.
These are not your grandma’s windmills. Each one is over two times as tall as the skyboxes at the University of Tennessee football stadium and taller than the Statute of Liberty. The blades on each one are as long as a football field. Their blinking lights can be seen for twenty miles.
Many communities where wind projects have been proposed have tried to stop them before they go up because once the wind turbines and new transmission lines are built, it is hard to take them down.
In October, the residents of Irasburg, Vermont, voted 274 to 9 against a plan to install a pair of 500-foot turbines on a ridgeline visible from their neighborhoods.
In New York, three counties opposed 500- to 600-foot wind turbines next to Lake Ontario. People in the town of Yates voted unanimously to oppose the project in order to “preserve their rural landscape.”
In January, Apex Clean Energy announced it would spoil Tennessee’s mountain beauty by building up to 23 massive wind turbines in Cumberland County, less than 10 miles from Cumberland Mountain State Park, where for a half century Tennesseans and tourists have camped, fished and canoed alongside herons and belted kingfishers around Byrd Lake.
Residents are voicing their opposition to it. The city council has voted to oppose it.
Finally, Clean Line Energy is proposing to build a single 700-mile direct current transmission line from Oklahoma through Arkansas to deliver wind power to Tennessee and other southeastern states. Arkansas objects to the project, but the Federal government is attempting to use federal eminent domain to proceed. According to the Congressional Research Service, this would be the first time that federal eminent domain authority has been used for electric transmission lines over the objection of a State.
The wind production tax credit is as bad for taxpayers as giant wind turbines are bad for the environment. Clean energy research can help us lower the cost of energy, clean the air, improve health, reduce poverty, and deal with climate change.
Let’s end the wind production tax credit this year, instead of 2019, and authorize the $8.1 billion in basic energy research to find more ways to ensure the United States has reliable sources of cheap, efficient, and carbon-free electricity.
For access to this release and the senator’s other statements, click here.