Governor of wind-rich Oklahoma says clean energy tax credits not needed

Source: By Justin Jacobs in Houston, The Financial Times • Posted: Thursday, September 1, 2022

Kevin Stitt leads state with booming renewables sector and deep ties to the oil industry

Oklahoma governor Kevin Stitt
Governor Kevin Stitt says Oklahoma’s large share of electricity from wind power has drawn manufacturers and big tech groups to the state © Sue Ogrocki/AP

The governor of Oklahoma, an oil powerhouse that has emerged as a top producer of US wind power, has dismissed new federal green energy incentives as unnecessary even as they promise an investment windfall for his state.

Kevin Stitt was one of a group of 22 Republican governors who slammed the Inflation Reduction Act, a climate and spending law passed by Democrats last month that included hundreds of billions of dollars of tax credits for renewable energy.

Much of that investment will go to Republican-led areas. American Clean Power, a trade group, has said that three of the top five states for new wind and solar capacity development last year were run by Republicans — Texas, Oklahoma and Florida. Oklahoma ranks third in electricity generation from wind in the US, with as much installed capacity as Italy.

Oklahoma is also a state where the fossil fuel industry has deep economic and cultural roots, producing about 400,000 barrels a day of oil.

In an interview with the Financial Times, Stitt questioned the necessity of the federal clean-energy incentives.

“Do those federal tax credits tip the scale? Absolutely. There’s going to be all kinds of industries that pop up to chase those tax credits and those dollars,” he said. “But if you ask me do I think we need those tax credits, no I don’t.”

His state offers its own local tax incentives for new wind and solar power projects. The government has also committed to buy hundreds of electric vehicles from the start-up Canoo as part of a deal to get the company to set up a manufacturing plant in the state.

“We know that the [research and development] dollars are headed into electric vehicle motors versus combustion engines and so we’re leaning heavily into that supply chain,” Stitt said.

The Inflation Reduction Act includes incentives aimed at spurring domestic EV and battery manufacturing that are likely to benefit Oklahoma’s efforts to attract those investments.

Wind turbines generate more than 40 per cent of the state’s electricity, which has been critical to drawing manufacturers and big tech groups such as Google, said Stitt.

Texas, the US’s biggest oil and gas-producing state, last month declared that asset manager BlackRock and other financial groups “boycott” the fossil fuel industry, which could lead state pension funds to divest shares in the groups.

Stitt has signed a similar law in Oklahoma that authorises divestment from alleged fossil fuel boycotters.

He said he would continue to “push back on things that we think are harming our state”, like “attacking” oil and gas.

But he denied the state was becoming hostile to clean energy investment, arguing an “all of the above” energy approach and pro-business policies that would continue to attract renewable energy projects.

“Businesses are going to go where they can make a return,” he said.