US subsidies for renewable energy, officially part of the Treasury Grant Program, will end on Jan. 1, 2011 unless lawmakers negotiate a deal to extend them before they leave Washington, D.C. for the holidays. Come January, a new, Republican-controlled Congress will be sworn in, presumably bringing with it a new philosophy on a whole host of issues.
Although discussions about the subsidies heated up this past week – Energy Secretary Steve Chu going so far as saying the US had reached a “Sputnik moment” due to the China’s embrace of clean energy, and urging lawmakers to pour more research and development money into the sector -- a proposal to extend the benefits floated by US Senator Max Baucus failed in the Senate.
In the meantime, industry executives and lobbyists for the industry are pushing hard for an extension.
Last Tuesday, for instance, the American Wind Energy Association issued a press release that said failure to extend the subsidies could jeopardize as many as 15,000 jobs in the sector.
“We are risking those jobs by not sending a clear signal that America remains open for business in wind energy," said Denise Bode, CEO of the organization.
On the other hand, she said, a one-year extension of the deal would lead to the restarting of production lines across the country and the recalling of laid-off workers, while at the same avoiding the layoffs in the renewable energy sector that would be inevitable without the subsidies.
“With consistent policies like [the investment tax credit program for renewables], wind energy can generate 20 percent of America's electricity within 20 years, and employ half a million Americans," she said.
Then on Thursday, during Washington D.C. gathering sponsored by the American Council on Renewable Energy organization president Mike Eckhart, said Congressional inaction on the subsidies would “put at risk important market momentum, substantial private investment and 200,000 jobs over the next two years.”
Sen. Baucus’ rejected proposal would have provided $3 billion in federal grants in 2011, and would have preserved a 30 percent tax credit for builders of plants that manufacture solar panels or other renewable energy technologies.
After its failure, 17 Senate Democrats sent a letter to the body’s Majority Leader, Harry Reid, urging him to add an amendment extending the subsidies to the tax bill the Administration had hammered out with the Republicans.
“We will have difficulty supporting tax legislation currently being drafted for Senate consideration that fails to include an extension of the Treasury Grant Program,” the senators wrote.
Since it began in 2009, the grant program has helped fund more than 1,465 projects nationwide and has created more than 55,000 jobs in wind energy alone, the senators said.
Congressional Democrats were angered by the deal, which extends Bush Administration-era tax cuts for two years and also extends unemployment benefits in the US for 13 months. They contend they were left out of the discussions and that President Obama should have pushed for more concessions from the Republicans.
The Republicans have so far balked at the idea of rolling the subsidies into the deal, and are holding firm to their position that they weren't part of the agreement they reached with the White House.
As for the repeal of the US Gays in the military policy, known as Don’t Ask, Don’t Tell, efforts to do just that appeared to be the focus of Congressional attention on Friday morning. Sen. Joseph Lieberman, who is officially an Independent but was a member of the Democratic caucus, introduced a bill this morning to carry out the repeal. Outgoing House Speaker Nancy Pelosi has said she would immediately take the issue up in the House with the measure passes in the Senate.
If that were to come to pass, deal-making on a proposed nuclear arms agreement with Russia and measures directly of interest to the renewable energy sector would likely take centre stage next week.
On the bio-fuels front, the tax deal between President Obama and the Republicans does include an extension of a 45 cents per gallon tax credit for corn ethanol blenders. A 54 cent per gallon import tariff, designed to protect the US corn ethanol industry, was also extended through 2011, according to published reports.
For additional information:
____________________________________________________________________________________________________
