Created on Thursday, 11 October 2012 10:56 Published Date Hits: 1998
When Romney ridicules Obama’s commitment to slow climate change, he overlooks how excessive fossil fuel use causes sea level rise. Guess Romney doesn’t care if water swamps those off-shore islands where he stashes his cash.
That callous attitude is not the only flaw in Romney’s “business” model. It leaves U.S. business stuck with unneeded energy costs while other countries rapidly embrace clean technologies that don’t have fuel and pollution control expenses as a component of electricity price.
The European Union already has 94 gigawatts of wind-generated capacity; China has 63 GW — ahead of the U.S. (50 GW). Chinese wind-turbine capacity will rise to 200 GW by 2020 — enough to power 55 percent of U.S. primary homes.
By 2020, China will get 15 percent of its electrons from non-fossil fuels; Denmark (already producing 32 percent of its electricity with wind turbines) will increase that to 50 percent.
Eighty-three nations use wind power for commercial purposes. The cheaper electricity there makes it even tougher for U.S. businesses already struggling to compete with cheap foreign labor.
Meanwhile, Romney and some Republicans propose to hobble us further by eliminating the bipartisan production tax credit (PTC) for U.S. wind projects. Several major companies want congress to extend the PTC. They rely on a Navigant Consulting study. It estimates that extending the PTC to 2016 will result in 95,000 wind-supported jobs. However, killing the PTC will result in the loss of more than 37,000 American jobs in 2013. If he knew how to create jobs as he claims, Romney would not be waging war on wind projects.
The PTC on wind energy goes away when it is not needed. That happens after a turbine operates for 10 years and installation costs are covered. The credit has ranged from 1.5 to 2.2 cents a kilowatt hour (kWh). However, those tax breaks actually repay themselves by driving energy costs down.
For example, power from Montana’s Judith Gap wind farm has been 0.5 to 2.1 cents/kWh cheaper than electricity from coal. So, a large amount of the PTC incentive has been recovered in increased savings for rate (tax) payers. By 2015 the credit will cease for that project. Then, the savings from wind power will more than “repay” what has been “fronted” from the PTC. Also, the overall power price is lower because less natural gas is used to produce electricity when the wind blows. It’s one thing driving down the cost of gas used for home heating and power generation.
The PTC also levels an uneven playing field caused by non-tax subsidies fossil fuels now enjoy. To make coal power generation almost as clean as wind generation, we’d have to scrub more pollutants and sequester carbon dioxide from conventional power plants. That will add 2.5 to 5 cents/kWh to electric bills. Romney ignores that cost.
Finally, Romney’s belief that the private sector is the best or only place to develop U.S. jobs is passé. Subsidies by foreign governments change that. They stack the deck in favor of their monopolies. Thus, U.S. industry must compete in a less-than-free market. That’s the message from Solyndra’s bankruptcy — not the misleading disparagements of its loan guarantee that Republican campaign ads portray. Here’s what those ads leave out.
When our government guaranteed $535 million in Solyndra bonds, even Wall Street thought thin-cell solar panel manufacturing was a good bet. Then the Chinese government pumped $30-plus billion into Chinese companies manufacturing silicon solar cells. It drove the price of silicon cells down. That eliminated the price advantage Solyndra’s thin-cell technology had when the U.S. guaranteed its loan. Thus Chinese subsidies ruined Solyndra.
Those subsidies also threatened other U.S. manufacturing until Obama slapped a tariff on Chinese solar panels. It’s part of prudent policy that has increased the U.S.-made portion of wind turbines installed here from 25 percent in 2005 to 60-plus percent today; policy that “knows how” to create jobs with subsidies that repay themselves; policy that leaves us better off now than we were in 2005.