COMMENTARY: It’s Time to End Crony Wind Subsidies for Good

When former Massachusetts governor and Barack Obama protégé jumped on the green energy bandwagon, he bragged that the Bay State would have “America’s first offshore wind farm.” Like most every wind energy project, the $2.6 billion effort would operate off the backs of the taxpayers. Massachusetts plowed millions into the effort and the federal government kicked in another $150 million loan guarantee. Even “Fauxcahantas” Sen. Elizabeth Warren bragged about the project, saying, “Governor Patrick’s administration deserves credit for its work to support this project and to make Massachusetts a leader in clean energy.”

Today the project, one could say, is sucking wind, but not in the sense the environmentalists hoped. Contracts for the projects were terminated in December when financing for the deal dried up. Now the state is stuck with the bill. The story is a perfect example of the failed green dream of replacing oil, gas and coal power by “harnessing the power of the wind.”

Wind power is inefficient, expensive, and acts as a killing field for birds, including Bald Eagles that are often slaughtered by the spinning turbines. The U.S. Energy Information Administration admits that the cost of generating power from wind is three times as much as using electricity from natural gas. European nations like Spain that were on the forefront of the green energy revolution have raised the white flag and pulled the plug on many of their programs. Hence the desperate need for corporate subsidies.

In the United States, wind power corporations have survived, in part, from a government giveaway known as the “Protection Tax Credit.” The tax credit subsidizes producers of wind energy costing taxpayers an incredible $5 billion a year. Incredibly, the tax encourages companies like Berkshire Hathaway and Google to lower their tax exposure by investing in non-profitable wind projects that make no economic sense whatsoever. Warren Buffet of Berkshire Hathway, one of the richest men in the world, bragged that he would “do anything that is basically covered by the law to reduce Berkshire’s tax rate. For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

It appears Congress is coming to its senses and saying “No more.”

Rep. Kenny Marchant (R-TX) has introduced H.R. 1901, the PTC Elimination Act that would phase out and repeal the crony subsidy. “If we want to build a healthier American economy, Congress must get rid of the deadweight in the tax code that is limiting our nation’s potential. That’s why I have introduced legislation to eliminate the production tax credit,” Marchant said. “Since its creation in 1992, the PTC has ballooned from a temporary boost for energy innovation into a massive special interest handout for the now multibillion-dollar wind industry. Today the wind industry regularly produces more energy than the market demands while hardworking taxpayers shell out billions of dollars each year in PTC support. In fact, because the credit pays claimants for 10 years of energy produced, Americans are currently on the hook for a minimum of $6.4 billion over the next decade.”

Marchant deserves credit for taking a lead on this issue. The Al Gore’s of the world love to blow hot air when it comes to claims about the profitability of the wind energy sector. Just like any other corporation, the taxpayers should not be forced to subsidize an unprofitable and inefficient corporation that could not compete in the marketplace on its own. Congress needs to act on the Marchant bill.