When Congress passed its bill to temporarily avert the fiscal cliff, the legislation contained several unrelated measures that only congressmen could love.
Only in Washington are such crises seen as opportunities to spread gifts among friends. One example was an extension of the wind energy Production Tax Credit, a subsidy that helps a handful of businesses at the expense of our grandchildren.
“Although this deal is not perfect,” said Colorado Sen. Mark Udall, “I am glad my colleagues have acknowledged what I have spoken about regularly on the Senate floor: Wind energy creates jobs and benefits every American.”
According to the Joint Committee on Taxation, this one-year extension of the PTC for wind power will cost $12.1 billion in taxpayers’ money. One can understand the importance to Udall – about 5,000 Coloradans work in the wind energy business. But one has to wonder why all the other Coloradans should pay higher utility bills, and why their grandchildren should be saddled with unconscionable national debt in order to subsidize this one industry.
Absent these subsidies – which many experts have asked Congress to eliminate – Colorado’s energy would be supplied by businesses that compete in the marketplace, have long-term viability and do not require such tax credits to produce energy.
Oil and natural gas continue to be the most flexible, transportable, and affordable fuels in the marketplace today. Those who work in the exploration and production side of the oil and gas business are paid twice the average U.S. wage and don’t have to worry from year-to-year whether Congress will fund their jobs.
Today the U.S. oil and natural gas industry suports 9.2 million American workers. It also is responsible for 7.7 percent of the U.S. economy and sends an estimated $86 million every day to the U.S. Treasury in taxes, royalties, bonus bids, and other payments. Oil and natural gas companies receive the same tax incentives as others in the manufacturing sector, but their products’ value far outweighs those incentives, many of which are designed to help mom-and-pop energy companies defray the high costs of drilling wells.
Oil and natural gas products fuel more than 95 percent of U.S. transportation; provide chemicals for myriad consumer items from medicines to running shoes; power manufacturing plants, homes and business; and are a necessary component even of wind turbines, solar panels, and other energy sources.
Oil, natural gas, coal and other fossil fuels cannot be replaced simply by the wishful thinking of politicians, nor by taxpayer-funded freebies handed out to a few friendly companies. No other energy source offers the same advantages and can be produced in large enough quantities to supplant oil and natural gas, especially with dramatic increases in American production.
And that fact worries oil and gas critics. So they pressure Congress and the White House to fund pie-in-the-sky ideas.
In the past four years, the government has spent over $90 billion on Solyndra-like projects under the guise of reducing foreign oil dependency, and justifying it with scare tactics about peak oil or modern technologies such as hydraulic fracturing.
Yet despite the weak economy, the constant barrage of criticism and the regulatory tirade of the EPA, the American oil and natural gas industry has quietly stepped up U.S. production, leading the International Energy Agency (IEA) to predict that the United States soon will become the world’s top oil producer by overtaking Saudi Arabia by 2020. Energy analysts say U.S. oil dependency could become a thing of the past.
The United States has an abundance of oil and natural gas. If our nation adopted pro-development policies, 1.4 million jobs could be created by 2030, according to a Wood Mackenzie economic analysis. It’s estimated that 85,000 new jobs could be created in Colorado alone.
But Coloradans will not fully experience the benefits of increasing oil and gas production unless elected officials get serious about energy production – especially since the federal government owns most of the state’s energy-producing land.
For 20 years, wind energy has been heavily subsidized. As 47 House members recently wrote in a letter to Speaker John Boehner, “[It] is time for the federal government to stop picking winners and losers in the energy marketplace.”
While mandating that Americans pay more in taxes this year, it made no sense for Congress to extend the costly wind PTC. We have better and more reliable energy resources right under our feet.