The Koch Brothers Are Nonetheless Making an attempt To break Wind
Rep. Mike Pompeo (R-Kansas) is the Koch brothers’ point man within the House. (AP photograph)
As Congress dithers for the umpteenth time over extending a key subsidy for wind vitality, the industry once once more is up in the air. Called the manufacturing tax credit (PTC), the subsidy helps level the enjoying discipline between wind and fossil fuels and has confirmed to be vital for financing new initiatives, helping to make wind one of the fastest rising electricity sources in the country. Given the planet must transition as shortly as attainable away from coal and natural gasoline to carbon-free vitality to avoid the worst penalties of local weather change, who would be against renewing wind’s tax credit
The Koch brothers, that’s who.
Charles G. and David H. Koch — the billionaire owners of the coal, oil and fuel Koch Industries conglomerate — have enlisted their extensive network of assume tanks, advocacy teams and associates on Capitol Hill to spearhead a marketing campaign to tug the plug on the PTC. Never thoughts the truth that the oil and gasoline trade has averaged 4 occasions what the wind tax credit score is worth in federal tax breaks and subsidies annually for the last 95 years.
The Koch network is fighting the wind business on numerous fronts. Last month, Koch-funded Congressman Mike Pompeo (R-Kansas) sent a letter signed by 52 Home members to the chairman of the Home Ways and Means Committee, urging him to let the PTC expire. In the meantime, a coalition of some 100 nationwide and native teams organized by the Koch-based People for Prosperity sent a letter to every member of Congress asking them to do the same. And earlier this month, the Koch-funded Institute for Vitality Analysis launched an anti-PTC advert marketing campaign and launched a report claiming that only a handful of states really profit from the subsidy.
Malcolm Gladwell did not embrace this battle in his new ebook David and Goliath as a result of, given the chances, it’s more like Bambi versus Godzilla.
The Kochs’ Man in Congress
The fact that Kansas Rep. Mike Pompeo is the Kochs’ level man to scuttle the PTC within the House is a bit ironic given his state is a wind energy leader. Kansas has the second highest wind potential in the nation, it has already attracted more than $5 billion in wind industry investment, and final 12 months wind generated eleven.Four % of its electricity. With stats like that, the business has broad bipartisan assist. Kansas Gov. Sam Brownback and Sens. Jerry Moran and Pat Roberts — all Republicans — are massive fans.
Pompeo, who has been in Congress since only 2011, would argue that he is towards all power tax credits. For the second year in a row, he has launched a invoice that would get rid of tax breaks that profit oil, pure fuel, coal, nuclear, electric autos, various fuels, solar and wind, including the PTC, which gives wind builders a tax credit of 2.3 cents for each kilowatt-hour of electricity they produce.
But there is a catch. Though it seems evenhanded, Pompeo’s invoice would severely hamper wind and solar but preserve plenty of oil, gasoline and coal subsidies, including the proportion depletion allowance, the power to expense the prices of exploration, and the accelerated depreciation of sure kinds of “geologic property.” These and different tax breaks he left out of his bill can be value about $12.5 billion to the oil and fuel industry from 2011 by 2015, in line with a March 2012 Congressional Analysis Service report.
Why is Pompeo so down on wind Maybe it is as a result of Koch Industries is headquartered in Wichita, smack-dab in the midst of his district — and the truth that the corporate is by far and away his largest campaign contributor. Since 2010, Koch Industries has given him $200,000, more than four instances what his second highest contributor kicked in. Apart from Koch Industries, three other oil corporations are among Pompeo’s top five contributors — McCoy Petroleum, Mull Drilling and Richie Exploration — and so they’re additionally based mostly in Wichita.
What about the opposite 51 Home members who signed Pompeo’s letter Because it turns out, 65 % of them acquired contributions from Koch Industries through the final two or three campaign cycles, according to Federal Election Commission data compiled by the nonpartisan Heart for Responsive Politics. A natural gas price projections quarter of them, in the meantime, cashed checks from ExxonMobil. And except for two congressmen who did not take any energy business money, the signatories obtained sizable contributions from a lot of different firms that compete with wind, including coal barons Arch Coal and Alpha Pure Resources; oil and fuel giants Chesapeake Energy, Chevron, ConocoPhillips and Valero Vitality; and Exelon, which owns probably the most nuclear reactors within the nation.
Individuals for (Koch) Prosperity Weighs In
Pompeo’s letter came on the heels of a letter from the Kochs’ flagship advocacy group, People for Prosperity, calling for Congress to kill the PTC. AFP’s letter, which was signed by 102 organizations, claims that “the wind trade has very little to indicate after 20 years of preferential tax treatment” and declares that “Individuals deserve energy options that could make it on natural gas price projections their very own within the marketplace — not ones that should be propped up by government indefinitely.”
Is that right Little to show Preferential tax treatment
In truth, till Congress left the wind industry hanging late final 12 months, it had been doing quite effectively. Even with a deep recession and sluggish restoration, over the previous 5 years — with the help of the PTC, stimulus spending and state renewable electricity standards — the trade doubled its electricity output, employment and non-public investment. In 2012, home manufacturers produced roughly seventy two % of the wind turbine equipment erected throughout the nation — practically triple the proportion in 2006 — and more than thirteen,000 megawatts of latest wind technology capacity was installed. By the tip of final 12 months, there were sufficient wind turbines to power 15 million typical American homes — without toxic pollutants or carbon emissions.
However AFP’s complaint that the wind trade has been on the dole far too long is much more galling. What about the oil and gasoline business It’s been feeding on the federal trough since 1918! On average, the industry has benefited from $4.86 billion in tax breaks and subsidies in as we speak’s dollars every year since then, according to a 2011 examine by DBL Buyers, a venture capital agency. Renewable power technologies, in the meantime, averaged solely $370 million a year in subsidies between 1994 and 2009. The 2009 stimulus package deal did provide $21 billion for wind, solar and different renewables, however that support barely begins to steadiness the scales that have tilted towards nuclear power for greater than 50 years, oil and gasoline for 95 years, and coal for greater than two centuries.
So who signed the AFP letter About half of the signatories are native tea occasion associates and anti-wind NIMBY groups of indeterminate size and funding. The opposite half are, for essentially the most half, relatively obscure national groups, however there are a couple of that have attracted consideration over time for his or her contrarian views on local weather science and renewable power. Like AFP, those teams are awash in petrodollars. The American Energy Alliance (and its dad or mum, the Institute for Power Research), Aggressive Enterprise Institute, Freedom Works, Frontiers of Freedom and Heritage Action (and its guardian, the Heritage Foundation) collectively have obtained hundreds of thousands of dollars from Koch household foundations, ExxonMobil and the American Petroleum Institute, the oil and fuel trade’s premier trade affiliation.
The Institute for Energy Research’s Questionable Analysis
On December three, the Institute for Energy Analysis and its political arm, the American Energy Alliance, sponsored what they dubbed the “wind welfare” summit in Washington, D.C. that includes IER founder and CEO Robert Bradley Jr. a Koch community veteran. AEA announced it could spend $forty,000 on print and digital advertisements calling for an finish to the PTC and is flying in anti-PTC advocates for meetings on Capitol Hill.
Bradley presumably highlighted the findings of a report IER released the day before claiming that a small variety of states with wind sources — Iowa, North Dakota, Oklahoma and Texas — are reaping the benefits of the PTC while 30 states and the District of Columbia are “losing hundreds of thousands” to fund it.
The report’s findings, nonetheless, don’t hold as much as scrutiny. Mike Jacobs, a senior power analyst on the Union of Involved Scientists, pointed out in a recent weblog that IER ignored the truth that a lot of the states it recognized as “net payers” are dwelling to wind trade manufacturing facilities. There are sixty two companies in Ohio making turbine parts, for example, forty in Michigan and 21 in California. Jacobs additionally found that IER downplayed the truth that “the PTC benefits shoppers the place wind-generated electricity provides to the supply and lowers the value of electricity, landowners who obtain lease payments from the wind turbines, and local communities that acquire tax funds on put in wind farms.”
Jeff Spross, running a blog on the center for American Progress’ ThinkProgress website, also chided IER, stating that almost all industries aren’t equally distributed throughout the nation. “The oil and gasoline industries, as an example, benefit from a wealth of federal tax carve-outs,” he wrote, “however the financial exercise they generate is concentrated in just some key states.”
In other words, it is disingenuous to single out the wind trade.
Twisting in the Wind
While Congress has generously provided the fossil-gas and nuclear-power industries numerous everlasting subsidies, it has usually granted the wind trade the PTC on a short-time period foundation after which wavered over renewing it. Last 12 months the PTC expired on December 31, however as part of the “fiscal cliff” price range deal the subsequent day, Congress extended it for the seventh time since it debuted in 1992 — for only one yr.
This uncertainty over the PTC’s status has put wind developers at a distinct drawback, making it tough to attract investors and plan ahead. Last yr’s cliffhanger, for instance, undoubtedly did a number on the business. Wind farm building has fallen off dramatically compared with 2012: Just one utility-scale wind turbine was put in in the primary six months of this year. Enterprise picked up considerably in the third quarter, with sixty eight.Three megawatts put in, in response to the American Wind Vitality Affiliation, but that’s far below the typical of more than 1,000 megawatts that the industry constructed in most quarters lately.
Provided that it takes years to plan, finance and construct a wind farm, Congress is once more undermining the business’s potential by sluggish-strolling the PTC extension this year. And that potential is great. Wind at present generates about 4 percent of U.S. electricity, but by 2030 it might produce more than 20 p.c, in accordance with the U.S. Department of Energy. The DOE’s Nationwide Renewable Power Laboratory is also bullish on wind and renewables writ giant. Final 12 months, it printed a report that concluded at present’s commercially obtainable renewable applied sciences might easily generate 80 % of U.S. electricity by 2050, with almost half coming from wind. If the Koch brothers and their allies have their manner, nevertheless, it likely will take so much longer to get there — and it’ll price a hell of a lot more.