Obama and Romney square off on energy issues

Source: Nathanael Massey, E&E reporter • Posted: Wednesday, August 15, 2012

The U.S. wind sector grew substantially during 2011, a trend that is expected to continue until the end of this year, according to a new report by the Department of Energy.

Lingering uncertainty over the fate of federal incentives for renewable energy, however — primarily the production tax credit and investment tax credit for renewable energy, both set to expire in December — could see that growth decline severely in only a matter of months, the document notes.

The report was bolstered by a fact sheet released by the White House that noted that renewable energy generation in the United States has doubled since 2008, in large part because “the Obama Administration has made the largest investment in clean energy in history and the United States.”

The timing of the report’s release, at a moment when both President Obama and presumed Republican nominee Mitt Romney are staking out their views on the future of U.S. energy policy, makes it one of the Obama administration’s strongest pitches yet in support of renewable energy.

That policy direction stands in sharp contrast to the message coming from the Romney campaign, which in recent weeks has stepped up calls to repeal federal incentives for renewables and create a “level playing field” for all energy sources. In late July, the campaign released a statement saying that, if elected president, Romney would allow both the production tax credit and the investment tax credit to expire.

Those programs are identified by the DOE report as “key factors” driving the growth of the U.S. wind sector, without which the sector’s current expansion would be seriously curtailed.

Today, the Romney campaign amplified its candidate’s contrasting energy views, issuing a press release stating that “across the nation the Obama Administration has waged a war on coal and even promised to bankrupt coal plants.” The release, which appeared to be aimed at Ohio, a crucial electoral battleground, seized on a remark made by Obama in 2008. In a press interview, he said utilities would be free to continue to build coal-fired power plants but added that doing so could bankrupt them because they would have to pay for excess emissions when greenhouse gas regulations kicked in.

Obama stresses growing role of renewable energy

Wind power has also begun to play a role in the economies of Ohio and other Midwestern states. It accounted for 32 percent of all added electric generation capacity in 2011, and the DOE report anticipates another strong surge in 2012 as companies rush to complete existing projects before the expiration of the production tax credit and investment tax credit. After that, however, the continued expansion of the sector becomes far less certain.

“Despite the improved cost, performance, and price of wind energy, policy uncertainty — in concert with continued low natural gas prices, modest electricity demand growth, and the … slack in existing state policies — threatens to dramatically slow new builds in 2013 and beyond,” the report states.

Already, those pressures are being felt by the upstream segments of the wind power supply chain. Though domestic manufacturing of wind turbine components has expanded considerably over the past decade, that growth “has led to an estimated over-capacity of U.S. turbine nacelle assembly capability of more than 5 gigawatts in 2011, compared to 4 gigawatts of under-capacity in 2009.”

“As a result of this over-supply, coupled with increasing competition [from China and South Korea], a wide range of turbine manufacturers have reported weakened financial results, with companies throughout the U.S. wind industry’s supply chain announcing cuts to their U.S. workforce,” the report notes.

The White House fact sheet highlights the 75,000 jobs and $14 billion in investments generated by the wind energy sector. As many as 37,000 jobs could be at stake if the production tax credit is allowed to expire, it notes.

Romney keeps a tight focus on fossil fuels

Romney, meanwhile, has similarly argued that his vision of the nation’s energy future will be key to creating jobs and kick-starting the economy. But where Obama’s rhetoric usually focuses on the role of wind, solar and other renewables in the country’s energy portfolio, Romney has argued that the way forward lies in expanded domestic drilling for conventional fossil fuels like coal, oil and gas.

To that effect, Romney’s election campaign has amplified its calls to end all renewable incentives, irritating some Republican legislators whose states have benefited from the federal programs.

He stops off in Beallsville, Ohio, today to visit American Energy Corp., an Appalachian coal mining company that has faltered under new clean air regulations enacted by the Obama administration. Both incumbent and challenger have used energy infrastructure as a regular backdrop for speeches and appearances along the campaign trail.