Governors’ Op-Ed: Congress should act to save nation’s wind jobs

The Hill • Posted: Thursday, November 29, 2012

By Gov. Terry Branstad (R-Iowa) and Gov. John Kitzhaber (D-Ore.) – 11/27/12 09:00 AM ET

Energy is the issue of our time. No other issue will have a greater impact on our future, our air quality, our water resources, our economy, and our quality of life.

The central question is whether we will shape our energy and economic future through sustained strategic investment and development, or whether we will allow other nations’ economic and energy policies to shape us. This is what Congress must ask itself as it again considers the renewal of the wind energy production tax credit (PTC). And for the future of wind energy in America, this question has become increasingly critical throughout 2012 because of Congressional inaction. The wind industry, which directly employs some 75,000 people in good paying jobs in states across the nation, has already lost over 3,000 jobs and stands to lose another 30,000 within the next few months if Congress fails to extend this job-critical credit.

While the nation lacks a clear energy policy, Congress has effectively used tax incentives to drive deployment of domestic energy sources. These deployment incentives create manufacturing efficiencies and technological improvements that research alone cannot deliver. Whatever one’s view of oil, gas, coal, nuclear, and other forms of energy, there is widespread agreement that tax incentives work. The shale gas revolution is a case in point where tax incentives created vast domestic energy supplies. If the production tax credit for wind expires, wind will be the only energy source without federal tax support. That would be bad public policy.

A smart, effective tax policy that has always enjoyed strong bipartisan support, the PTC encourages entrepreneurs and incentivizes private investment by rewarding wind energy projects only when they are brought online and are successfully producing clean, affordable energy. By providing wind energy companies with the financial certainty necessary to secure the required private capital to begin developing projects, the PTC has been an important part of the growth in America’s wind energy sector. As a result, wind energy now drives $10 billion to $20 billion a year in capital investment; supports tens of thousands of jobs across the county; and accounts for 35 percent of all new U.S. power capacity installed over the last four years.

Iowa is now producing over 20 percent of its electricity from wind farms at stable, dependable rates. We now have over 215 wind-related businesses operating in 55 counties across Iowa, providing jobs for as many as 7,000 workers. In Oregon, wind energy has invested nearly $6 billion in capital and enough wind capacity has been installed to power approximately 770,000 Oregon homes. In the process, thousands of Oregon jobs have been created by wind energy. The benefits of these energy developments also flow directly back to local communities. Land lease agreements from wind power projects have helped keep afloat farmers, ranchers and other rural landowners that have been hard hit by the economic downturn while millions of dollars in additional property tax payments have flowed to cash strapped local governments. In fact, recent estimates of the federal and state tax revenues generated throughout a wind project’s life exceed the tax savings afforded by the PTC.

The economic benefits enjoyed by our states because of wind energy can be maximized nationally if we reaffirm our commitment to energy diversity and smart economic policies like the PTC. The U.S. Department of Energy under the Bush Administration predicted that with the right policy support, national wind power could provide 20 percent of the United States’ electricity by 2030. If we can achieve nationally what has already been done in Iowa and Oregon, the wind energy industry would support 500,000 American jobs, generate more than $600 million a year in land lease payments to rural landowners, and rural communities would see increases of as much as $1.5 billion annually in property tax revenues that can be used to fund schools, public safety and other critical public services that are feeling the squeeze of these tough economic times.

Congress faces a critical test in the next few weeks in determining America’s energy future. Without action, the PTC will expire. That needless uncertainty has already cost thousands of jobs and will cause future wind energy development to come to a grinding halt if Congress again fails to act. Should Congress fail to renew this successful program, jobs, communities and the energy futures of Oregon, Iowa, and other states in the coalition will all be in jeopardy.

Iowa Governor Branstad and Oregon Governor Kitzhaber are the chairman and vice chairman of the 28 state Governors’ Wind Energy Coalition.