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It’s All About The Science

To have a proper understanding of the implications of the Production Tax Credit (PTC) being extended, we need to have a thorough grounding about what is being subsidized: wind energy.

What is the point of taxpayers funding an energy source that has no scientifically proven net technical, net economic, or net environmental benefits? Please click on the image below to see the comprehensive slideshow where many of these details are explained. To pass this on to other open-minded citizens, please reference them to “EnergyPresentation.Info”.

SAMPLE RESOURCES:

1. There are several excellent sites that have large collections of objective and scientifically supported material about industrial wind power. Two of the best in the US are: National Wind Watch and Industrial Wind Action.

2. We have written two position papers that should be closely reviewed: a) a one-page document that explains why BOTH political parties have good reason to vote against any PTC extensions, and b) a four page document that outlines the basic responses to each of the main contentions by lobbyists campaiging for a PTC extension.

3. Negative Electricity Prices and the PTC.

4. A recent PTC discussion at National Journal had several insightful comments made by independent energy experts. Some of those are:

In 2009, the federal government fined ExxonMobil for the unintentional deaths of 85 birds in five states during a five-year period.

Meanwhile, well over 500,000 birds and countless bats are killed annually by wind turbines, according to the US Fish & Wildlife Service (FWS) and other experts. The slaughter “could easily be over 500” golden eagles a year in our western states, says Save the Eagles International biologist Jim Wiegand.

Bald eagles are also being butchered. The two species body count could soon reach 1,000-per-year.

Supposedly “eco-friendly” wind turbines are sending some of America’s most important and majestic sovereigns of our skies to the edge of extinction: eagles, hawks, falcons, owls, whooping cranes, condors, herons, egrets, snow geese, bats that protect crops by eating insects, and many more.

And yet, in the course of three decades, the government has never prosecuted or penalized a single wind turbine company for this rampant, widespread and growing eco-slaughter. Instead, it subsidizes the slaughter – to the tune of $2,200-per-megawatt via the wind energy production tax credit (PTC) alone, plus additional state and federal financial assistance, without which the industry would not survive.

One could accurately say wind turbines represent the only truly shovel-ready projects on the Obama Administration energy agenda – with wind project operators employing “slice, shovel and shut up” tactics to help hide the evidence of how extensive the slaughter has actually become.

With Congress preparing to vote on extending the PTC yet again, it is time to assess how worthless wind energy actually is for generating electricity – and how destructive it is of vital wildlife species.

Industrial wind energy fails every test for judging sensible, responsible, sustainable energy policies. It requires perpetual subsidies to survive. By taking tax revenues from productive sectors of the economy, to generate expensive, unreliable electricity, it kills two to four jobs for every “green” job created. Turbines harm people’s health and well-being and lower property values of nearby homes.

Big Wind requires vast land and raw materials for turbines, transmission lines and mostly natural gas-fired backup generators. Mining and processing rare earth metals for turbine magnets devastates agricultural and wildlife habitat areas and severely harms human health in China, where most of the “green” turbine manufacturing jobs are actually created.

Wind is equally worthless for preventing “dangerous” climate change. Backup fossil fuel generators must run on standby constantly – and full-bore 70-80% of the time, when the wind isn’t blowing at required speeds – emitting carbon dioxide every minute. Manufacturing all the concrete, steel, copper, fiberglass and other components of turbine blades, towers and power systems, transmission lines and towers, and backup generators also requires voluminous hydrocarbon fuels and emits gigatons of carbon dioxide.

Meanwhile, China, India and other developing countries are burning coal (and emitting CO2) at ever-increasing rates, to generate electricity and improved living standards for their people.

But the bird and bat butchery is the most unconscionable and unsustainable aspect of wind pseudo-power.

In the 86-square-mile area blanketed by California’s Altamont Pass wind turbines, no eagles have nested for over 20 years, and golden eagle nest sites have declined by half in surrounding areas, even though both are prime eagle habitat, Wiegand notes. Wildlife expert Dr. Shawn Smallwood estimates that 2,300 golden eagles have been killed by Altamont turbines over the past 25 years.

The wind industry keeps the publicly acknowledged death toll “acceptable” by having crews: search around turbines that are not operating; search only areas close to turbines, deliberately missing birds that were flung further by the impact or limped off to die elsewhere; search for carcasses only every 2-4 weeks, allowing coyotes, vultures and other scavengers to carry most evidence away; not count disabled or wounded birds and bats; and remove carcasses under “slice, shovel and shut up” guidelines.

These “deliberately flawed” methodologies are compounded by turbine site security that makes independent investigations almost impossible, adds American Bird Conservancy analyst Kelly Fuller. Amazingly, Fish & Wildlife does not require that even the low-balled raw data be made public, and what little does get released is often further filtered, massaged and manipulated.

The FWS turns a blind eye to all of this. Now it is going much further.

It wants to grant “programmatic take” permits, allowing turbine operators to repeatedly, systematically and “inadvertently” injure, maim and kill bald and golden eagles, without fear of penalty – turning what has been outrageously selective (non)enforcement of bird protection laws into a 007 license to kill. While the new rule is “not specifically designed” for the wind industry, it will be by far the biggest beneficiary.

The FWS says it can do this based on illusory “advanced conservation practices” that are “scientifically supportable” and “represent the best available techniques to reduce eagle disturbance and ongoing mortalities to a level where remaining take is unavoidable and incidental to otherwise lawful activity.” The Service also claims “mitigation” and other “additional” measures may be implemented where necessary to “ensure the preservation” of eagles as a species. What bunk.

When it wants to restrict development, the FWS defines species, subspecies or “distinct population segments” for sage grouse and other wildlife – or labels a species “imperiled” in a selected location, even when it is abundant in nearby locations. With eagles, the proposed “take” rules strongly suggest that the Service could easily claim the presence of eagles in some parts of the Lower 48 States or even just Alaska would ensure their “preservation,” even if they are exterminated or driven from numerous habitats.

Attempts to “mitigate” impacts or establish new population segments will mean imposing extra burdens, restrictions and costs on land owners and users outside of turbine-impact areas. Nor are only eagles affected.

Endangered whooping cranes are also being “sliced” back to the verge of extinction. Since 2006, installed turbine capacity within the six-state whooping crane flyway has skyrocketed from 3,600 megawatts to 16,000 MW (some 8,000 turbines) – and several hundred tagged and numbered whooping cranes “have turned up missing and are unaccounted for,” says Wiegand.

Incredibly, another 136,700 MW of new bird Cuisinarts (some 55,000) are planned for these six states! “The whooping cranes will be gone within 5 years,” Wiegand is convinced. “By then there will be so many turbines with so much rotor sweep, it will be impossible for them to survive.”

How can the American people allow this to happen? And do it for such an expensive, unreliable, harmful and worthless energy source? The crony corporatism and vote buying need to end.

Voting to extend the PTC, or allow wind turbines in or near important bird habitats and flyways, brings the ultimate extinction of majestic and vital species closer to reality in locations all over the United States.

No members of Congress should want that on their conscience. No Americans should tolerate it.

Congress should let the production tax credit for wind (and other sources of energy) expire. Wind is old electricity generating technology and after more than 30 years of subsidies, it is time for wind to grow up and compete on its own, instead of expecting to get paid by taxpayers to do its job.

Congress has been supporting wind production since at least 1978 on the premise that wind is an infant industry requiring a brief leg-up to become cost-competitive with coal, natural gas and other sources of reliable, affordable energy. But if wind is an infant industry, it has to be one of the oldest infant industries on the planet.

In 1882, Thomas Edison built the Pearl Street Station in New York City—a coal fired power plant. A mere 5 years later, a Scottish academic named James Blyth built a wind turbine to make electricity and run the lights on his cabin. After 125 years of generating electricity, wind should be ready to leave its government crib and stand on its own.

Wind lobbyists argue that the PTC is necessary to continue building wind installations, while also lobbying for mandates requiring utilities to buy wind electricity. This shows that wind is not ready for primetime, but is subsidy- and government edict-dependent. If wind can’t compete after 125 years without consumers being forced to both subsidize and purchase it, when will it be?

The PTC is so helpful to wind developers because the size of the tax credit is very large compared to the wholesale price of electricity. The production tax credit is 2.2 cents per kilowatt-hour of electricity produced from wind (and other specified sources). The wholesale price of electricity is less than 3 cents per kilowatt-hour in some markets and about 4.5 cents per kilowatt-hour in other markets. This makes the production tax credit worth 50 to 70 percent of the wholesale price of electricity. If Chevy Volts got the same treatment, the feds would be subsidizing each one to the tune of $19, 572 to $27,401 per car and people would be forced to buy them(http://www.edmunds.com/chevrolet/volt/2013/options.html?style=200424007&sub=hatchback 50-70% of listed price)

Another problem with the PTC is that the electricity market is built to match electricity demand with electricity production, but the PTC gives wind producers no incentives for electricity production when electricity demand is high. When electricity demand is high, electricity generation is very, very valuable, but to wind producers electricity demand matters little; they make money when the wind blows, which often happens to be when electricity is least needed. The wind industry gets paid to make energy when it isn’t needed but doesn’t make it when it is needed, and still wants more subsidies and government to force consumers to buy its product. If that doesn’t sound like a government boondoggle, I don’t know what does.

The PTC doesn’t help Americans or America. The latest proposal would cost taxpayers $12.1 billion over ten years but it doesn’t help make the electricity grid more robust or economical. Now is the time for government to tell a 125-year-old infant to grow up.

Guaranteed market shares. Large subsidies both direct and indirect. Exemptions from environmental requirements that have shuttered other industries. Applause of the sort that would have made Stalin blush. A virtual idolatry in the collective cult vision of the usual suspects, that vast Beltway herd of independent minds.

Such are the blessings enjoyed by “renewable” energy generally, and wind power in particular, courtesy of the deep thinkers in Washington and a number of state capitals, and of the right-minded everywhere. And yet notwithstanding all the hype, wind power accounted for all of 2.9 percent of American electricity production in 2011, while receiving 42 percent of all federal financial support for the electric power sector. Solyndra and similar cronyism fiascos may garner the headlines, but the real scandal is the utter waste of taxpayer and consumer dollars attendant upon this largesse enjoyed by the producers of wind power.

No matter: Hope springs eternal indeed, in particular when it is Other People’s Money being spent. The most prominent example of that support is the federal production tax credit for wind power, created in the 1992 Energy Policy Act—yes, two decades ago—as a purported tool with which to overcome market rigidities, to level the playing field, and to allow the infant wind industry to establish a foothold. That wind power remains utterly uncompetitive is illustrated by market behavior in 2007-2008 and 2011-2012, periods when the expiration of the PTC loomed large: Private investment in wind facilities dried up.

This dismal competitive performance is instructive. Why has wind power’s market share remained so small despite substantial policy support? There are three reasons that are inherent in the nature of the technology, that is, that make current subsidy policies futile. To wit:

  • – The unconcentrated energy content of wind flows. Relative to fossil or nuclear fuels, the energy content of wind (and sunlight) is diffuse, the upshot of which is the massive investment in land needed to make wind power even technically practical. A semi-reliable 1000 megawatt wind farm requires on the order of 250 square miles; a comparable gas-fired plant needs about 10-15 acres.
  • – Because of this enormous land requirement, appropriate sites for wind farms are limited, and the best (lowest-cost) ones obviously have been used first. That means that scale economies and learning efficiencies, even if still available, are irrelevant: At the industry level, average production costs must rise as newer sites prove less suitable than earlier ones, and as large additional transmission costs must be incurred to send wind power to consumers. In contrast, conventional power plants, in principle, can be sited virtually anywhere, and fuels can be transported to the plants. That is why wind “capacity factors”—reliability—have decreased monotonically over the last decade, by about 40 percent.
  • – Do we really need to note that the wind does not always blow? It is, in a word, intermittent; but the need for electricity is unrelenting. So backup generating capacity—coal, gas, and nuclear plants—is needed to avoid blackouts as more and more wind turbines are connected to the grid. Suffice it to say that the backup capacity is not free—consumers have to pay for it—and because the coal and gas plants have to be cycled up and down depending on wind conditions, they cannot be operated efficiently. The net effect is higher costs, less reliability, and more—yes, more—air pollution. Thus have we achieved the perfect green trifecta, one of many such fruits of modern environmentalism.

The production tax credit is a figurative rathole: costly, environmentally destructive, and a repository of perverse incentives. Among the latter is the implicit reward that it represents for innumerable interest groups seeking favors from Washington, not a salutary effect. It deserves a quick and final burial.

The wind tax credit, the production tax credit, and the related push for renewable performance standards should be relegated to a scrap heap of flawed ideas. The “off-fossil” energy agenda that is the foundation for alternative energy subsidies has not worked. It has wasted money and imposed unnecessary costs on the economy while fossil energy has demonstrated it can and will remain the dominant source of energy for decades to come. In its latest Annual Outlook, the Energy Information Administration (EIA) estimates fossil energy will provide almost 75 percent of our energy needs in 2035.

The production tax credit was sold on the basis of helping renewables to get a leg up as infant industries. Well, these industries have reached adulthood and still cannot stand on their own without government help. Where there is strong wind, there are not users. The only way to compensate for wind being intermittent is to add to base load capacity, which raises costs.

It is also hard to justify the tax credit when 30 states have renewable mandates, which also make little sense. Eliminating the production tax credit means more tax dollars to the US Treasury.

The helping hand of subsidies has become a source of an addiction. Not only do wind developers / operators get the tax credit, but by successfully lobbying to get renewable mandates in 30 states, they have guaranteed a fool proof way of obtaining healthy profits. This approach is a legal form of theft.

Subsidies that target favored types of energy or industries have become an economic cancer, and like human cancers they do real damage. There is an abundance of evidence that subsidies waste scarce resources, distort investment decisions, and do real economic harm.

We have seen the allure of government largess entice more and more companies and charlatans to seek profit through legislative provisions and regulations instead of the market place. Crony capitalism has become a growth industry.

Our economy and our citizens have realized great benefits because of advances in technology, and innovation that are the result of market forces and the opportunities they create. A growing reliance on federal hand-outs dulls those forces, misuses human capital, and has the unintended consequence of retarding economic growth.

While eliminating the credit is necessary, it is not sufficient. It is necessary to eliminate renewable energy mandates as well. There is no environmental or energy justification for such mandates and subsidies in an era of abundant natural gas, which, along with technology advances, is pushing the carbon intensity of the economy ever lower and contributing to job growth and new investment opportunities. If the real objective of renewable energy subsidies and mandates is lower emissions, we are achieving them by shifting from coal to gas.

Government actions that enrich rent-seekers and venture capitalists do so not only at the expense of the economy but also on the backs of those who can least afford the higher costs those actions produce – the poor. A recent report from the Manhattan Institute, The High Cost of Renewable-Electricity Mandates, cites Barbara Alexander of the Oak Ridge National Laboratory who points mandates increase energy prices, which most directly affect the poor.The study also cites a former federal regulator who notes that mandates amount to a “back-end way to put a price on carbon.”

These mandates, which essentially are carbon taxes, have caused electricity prices to jump 31.9 percent in states with a National Renewable Energy Portfolio Standard (RPS) than in those without. The Heritage Institute, among others, analyzed the impact of renewable energy mandates and concluded that they have a significant negative impact on jobs and GDP. Politicians who claim that they want to get the economy moving again but who also push for renewable performance standards are either hypocritical or manifesting a major case of cognitive dissonance.

As we have seen time and time again, government tends to do a poor job of picking winners and losers. Wind and production tax credits are prime examples of policies that have not only failed to achieve the objective, they have punished other industries and imposed costs on taxpayers. If lawmakers truly want to affect change, they are best to work with industries to set goals and then allow all players to compete on a level playing field.