Don't pull the rug-and plug-out from renewable energy
By Sen. Chuck Grassley
The State of Iowa is a leader in feeding our nation and the world. We lead the nation in the production of corn, soybeans, hogs, and eggs. Iowa also leads the nation in renewable energy production. It's the largest producer of alternative fuels.
And Iowa is third in the U.S. in wind energy capacity. More than 27 percent of Iowa's electricity comes from wind—making it number one in the nation in the percentage of power from wind. The state of Iowa is proving that our farmers and ranchers can simultaneously produce the food, feed, fuel, and fiber that our country needs.
Biofuels are reducing our dependence on finite fossil fuels. They keep more money at home rather than sending it to Persian Gulf countries that may wish to do us harm. Over the past 30 years, our national security and economic well-being have been too dependent on oil imports from tin-horn dictators and regimes that sought to do us harm.
When you look at the big gurgling mess in the Middle East today, isn't it more clear than ever that we should do everything and anything possible to wean ourselves off foreign oil? We don't need to put a Navy fleet in harm's way to protect the shipping lanes for biofuels out of the Midwest. Our country needs a true all-of-the-above energy policy. We can't let our foreign policy be dictated by foreign oil dependence.
I'm also glad to have supported renewable electricity, particularly wind. I first authored the Wind Energy Production Tax Credit in 1992 to drive this renewable energy technology. I've worked for many years to provide as much certainty as possible to grow the domestic wind industry.
Last year, nearly 50 percent of all new electric generating capacity came from renewables. I know first-hand the boom and bust cycle that exists for renewable energy producers when Congress fails to extend critically important tax incentives. The lapse of renewable energy incentives has created a lot of uncertainty and slowed growth in the renewable industry. This serves only to hamper the strides made toward a viable self-sustainable renewable energy and fuel sector.
In recent years, there's been an increasing amount of opposition to some renewable electricity tax incentives. I'm sympathetic to the argument that the tax code has gotten too cluttered with too many special interest provisions. That's the reason many of us have been clamoring for tax reform for years now.
But just because we haven't cleaned up the tax code in a comprehensive way doesn't mean that we should pull the rug out from under domestic renewable energy producers. Doing so would cost jobs and harm our economy, the environment, and our national security.
The wind industry today supports 80,000 American jobs. The tax incentive has spurred $105 billion in private investment in the U.S. since 2005. Opponents of the renewable energy provisions would like to have this debate in a vacuum. They disregard the many incentives and subsidies that exist for other sources of energy and are permanent law.
For example, the 100-year-old oil and gas industry continues to benefit from tax preferences that benefit only their industry. Nuclear energy is another great example. The first nuclear power plant came online in the United States in 1958—some 57 years ago. Nuclear receives special tax treatment for interest from decommissioning trust funds. Congress created a production tax credit for this mature industry in 2005, which is available until 2020.
I authored the wind incentive in 1992. I know it won't go on forever. It was never meant to, and it shouldn't. I'm happy to discuss a responsible, multi-year phase out of the wind tax credit. In 2012, the wind industry was the only industry to put forward a phase-out plan. But any phase-out must be done in the context of comprehensive tax reform, where all energy tax provisions are on the table. And it should be done responsibly over a few years, to provide certainty and ensure a viable industry.
Good tax policy requires certainty that can only come from long-term predictable tax laws. Businesses need certainty in the tax code so they can plan and invest accordingly. The only sound way to reach this goal is through comprehensive tax reform. Targeting certain provisions for elimination outside tax reform makes little sense. I will work for a responsible transition for the wind production tax credit and hope to achieve a sensible policy for those who depend on it.
Senator Chuck Grassley has served the state of Iowa since 1981 in the U.S. Senate. For the Record is an edited version of a speech Senator Grassley made to the American Council on Renewable Energy Policy Forum in April 2015.