Romney's energy plan hurts Iowa
Republican presidential candidate Mitt Romney touted an energy policy based on fossil fuels — oil, coal, and natural gas — as a potential boon to Iowa’s farmers on Oct. 2.
Romney’s chosen energy policy heavily favors fossil fuels, which gives him plenty of political leeway to harshly rebuke President Obama’s support for clean energy but leaves him vulnerable in places where the alternative-energy industry is taking root. In Iowa, a burgeoning clean-energy industry with bipartisan support is being threatened by Romney’s energy policies and rhetoric.
Two prongs of the Romney energy plan, in particular, stab at the heart of Iowa’s energy industry: the elimination of federal subsidies for producers of wind energy and an increased focus on domestic and regional production of fossil fuels.
In 2011, about one-fifth of Iowa’s electricity was generated by wind turbines, the state’s second largest source of electricity after coal. Currently, producers of wind energy receive a federal tax break of 2.2 cents for every kilowatt-hour of electricity generated. The tax break was implemented in order to mitigate some production costs to ensure that wind could compete with entrenched energy sources like oil and coal.
Politicians from both parties, including Sen. Tom Harkin, D-Iowa, Sen. Chuck Grassley, R-Iowa, and Gov. Terry Branstad, support the continuation of the wind-energy tax breaks, citing uncertainty about future policy as an impediment to growth in an industry that employs more than 3,000 workers in Iowa.
While the current regulatory environment favors the growth of Iowa’s alternative energy sector, Romney’s policies would reverse that trend. He would eliminate the wind-energy tax break but maintain federal subsidies for fossil fuels. Additionally, Romney would increase the competitive advantage of fossil fuels by fast-tracking such projects as the Keystone XL pipeline in order to increase domestic supply and by eliminating environmental regulations to make the extraction and burning of these fuels cheaper.
The combined effects of these policies would be devastating.
A study of wind energy costs from the University of Illinois Urbana-Champaign determined that the tax breaks were necessary to the development of the wind industry and that even the threat of expiration has a negative effect on the industry. The study argues that because wind production requires a time-consuming installation process developers “may hesitate to start a new project due to the uncertainty that the credit will still be available to them when the project is complete.”
The wind-production tax break has been allowed to expire three times since it was introduced in 1992 — at the end of 1999, 2001, and 2003. During the years when the tax break was not in place — 2000, 2002, and 2004 — the number of new wind-turbine installations fell by an average of 81 percent. Already, the threat of expiration at the end of 2012 has led to depressed demand for wind turbines and, as a result, layoffs.
The rationale behind Romney’s opposition to subsidies for alternative energy is simple, at least from a political standpoint: Such programs have traditionally fallen under the purview of liberal energy policy. Romney has committed fully to the conservative notion that market forces should be the ultimate driver of economic behavior. On top of that, in this election cycle, stories of federal stimulus funds sent to companies like Solyndra, a now-failed solar-energy pioneer, are easy fodder for the conservative base.
In turning the future of alternative energy into a partisan issue, however, Romney is threatening one of the nation’s greatest bipartisan energy innovations right here in Iowa. Iowa’s wind sector is a testament to the universal appeal of an idea that works. To threaten the progress of clean, renewable energy on the basis of economic ideology or partisan pandering is unconscionable; it’s a disservice to Iowa and to the nation as a whole.
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