Wind Energy Politics in the U.S.

Wind versus coal. That was the basis of the battle in the battleground states of Colorado, Iowa and Ohio over the last couple of weeks.

President Obama made several public appearances in Colorado August 8-9 and in Iowa August 13-15. One of the key issues he addressed was the importance of the wind energy sector in providing manufacturing jobs in the U.S. and in contributing to a comprehensive energy strategy. Wind energy, he believes, will win votes.

Meanwhile, on Tuesday (8/14) Mitt Romney took the opposite bet. Distancing himself from the renewable energy folks, he cozied up to good old-fashioned coal interests. Appearing at a coal mine in the swing-state of Ohio, he stood in front of a giant American flag and soot-covered coal miners and said about the President “If you don’t believe in coal, if you don’t believe in energy independence for America, just say it. If you believe the whole answer for our energy needs is wind and solar, then say that.”

The Columbus Dispatch interviewed some of the folks attending the Romney event and asked them how they felt about the fact that Romney had completely changed his position. In 2003, as Governor of Massachusetts, he stood in front of a coal plant and declared, “I will not create jobs or hold jobs that kill people! And that plant, that plant kills people!” You can see the video here. Some of the coal miners responded that they were so anti-Obama they were willing to forgive Romney for his former position.

I think Romney is now presenting the stance of the hard Republican right on wind energy, which basically boils down to this: We can never get 100 percent of our energy from wind power, so we shouldn’t invest in it at all. Obama, on the other hand, is arguing for a comprehensive energy policy and wants to keep the U.S. as a leader in renewable energy, creating jobs as well as power.

For the rest of this post I’ll concentrate on the President and how he talked up the wind industry this week.

The White House and Wind

Wind is the topic of the moment for the Administration. Yesterday I got my daily email from the White House, and its subject line was “Wind Power Has Lift.” The email said,

“As President Obama has made clear, we need an all-of-the-above approach to American energy and the U.S. wind industry is a critical part of this strategy.”

It suggested that I visit the White House blog. There I read:

“From Des Moines [Iowa] to Amarillo [Texas] to Denver [Colorado], the American clean energy economy is hard at work – creating jobs right now and ensuring our global competitiveness in the clean energy technologies of the future. We can’t afford to break this momentum.”

I then surfed on over to the Department of Energy’s website and saw that the front page had been taken over by wind turbines! I’ve pasted screen shots of both of these sites at the bottom of this post since at least one of them is certain to change in the coming days as the Administration highlights new topics.

The email and two websites mentioned above point to a new Department of Energy and Lawrence Berkeley National Laboratory report called “2011 Wind Technologies Market Report,” an 81 page document full of juicy data and analysis. I’ve listed just a couple of points below that I thought were interesting:

“GE and Vestas both secured roughly 29% of U.S. market share (by capacity installed) in 2011, followed by Siemens (18%), Suzlon and Mitsubishi (both at 5%), Nordex and Clipper (both at 4%), REpower (3%), and Gamesa (2%).”

 

“The American Wind Energy Association (AWEA) estimates that the entire wind energy sector directly and indirectly employed 75,000 full-time workers at the end of 2011 – equal to the jobs reported in 2010 but fewer than in 2008 and 2009. Though domestic manufacturing capabilities have grown, uncertain prospects after 2012 – due primarily to the scheduled expiration of federal incentives – are pressuring the wind industry’s domestic supply chain as margins drop and concerns about manufacturing overcapacity deepen, potentially setting the stage for significant layoffs.”

Production Tax Credit

The reference to federal incentives to help the wind industry is an important issue that the President raised in Colorado and Iowa. A wind energy tax credit called the Production Tax Credit (PTC) was established in 1992 (though it has lapsed a few times). It provides tax relief to owners of renewable energy projects based on the amount of energy produced, not the investment they make, thus providing an incentive to produce as much energy as possible. The legislation is set to lapse at the end of the year unless Congress takes action.

On August 9 Bloomberg reported that the President, speaking in Colorado, attacked Romney for opposing the extension of the tax credit. Citing the American Wind Energy Association, the article states that the wind industry supports 5,000 to 6,000 Colorado jobs and “Letting the credit expire will lead to the elimination of 10,000 wind-industry jobs this year and another 27,000 in 2013….”

This possibility is already coming true in Colorado. According to the Denver Post, Vestas announced on Monday August 13 that it would be cutting about 20 percent of the 450 jobs at its Pueblo, Colorado plant, which makes wind turbine towers. Vestas attributed the cut directly to the possibility of the tax credit expiring: “Uncertainty over whether Congress will extend the Production Tax Credit is leading to a general market slowdown for wind power manufacturers and developers throughout the U.S.”

The announcement came only days after the President had visited the Colorado state fair in Pueblo (that same town) on August 9. Here is what he said about wind energy:

“At a moment when homegrown energy, renewable energy is creating new jobs in states like Colorado and Iowa, my opponent wants to end tax credits for wind energy producers. Think about what that would mean for a community like Pueblo. The wind industry supports about 5,000 jobs across this state. Without those tax credits, 37,000 American jobs, including potentially hundreds of jobs right here, would be at risk. Colorado, it’s time to stop spending billions in taxpayer subsidies on an oil industry that’s already making a lot of profit — (applause) — and let’s keep investing in new energy sources that have never been more promising. That’s the choice in this election.”

Of course the hot political topics are already shifting to other issues, but I find it really interesting that renewable energy has made it so high onto the list these days. I find it even more interesting that the President thinks supporting the wind industry is a vote getter in some key battleground states. As I sit here in Denmark right now, I know how the wind industry can revitalize a society, providing excellent jobs for welders, machinists, scientists, engineers, and more.

Many Colorado politicians understand that. Eight out of nine of Colorado’s U.S. Senators and Representatives (five Democrats and three Republicans) are in favor of extension of the wind energy tax credit.

Below are the two screen shots of the White House and the Energy Department focusing on wind this week.

White House site, August 16, 2012

White House site, August 16, 2012

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