The Production Tax Credit is a Modern Day Gordian Knot

By Roy L Hales

The “Tea Party” has been holding back approval of an $85 billion tax package since December, because it includes a $13 billion production tax credit (PTC) for wind energy. They claim that after “tens of billions of tax-payer dollars,” it is time to end “this sweetheart deal.” That’s an interesting sentiment, coming from people who apparently have no objection to letting oil producers continue to use “tens of billions of tax-payer dollars” every year. A broad spectrum of business leaders, and the governors of at least four states, are concerned about the impact delaying the PTC has had, and is having, on their economies. There is also opposition to wind farms from some environmentalists and many of the communities where they have been installed. The Production Tax Credit is a modern day Gordian knot.

Wind Turbine Stairs (Click on image to expand) – Patrick Finnegan, CC by SA 2.0

For those of you unfamiliar with the legend, whoever untied the Gordian knot was said to be destined to conquer Asia. Many tried, but everyone failed until Alexander the Great arrived on the scene. He used his sword.

Barak Obama’s proposed budget calls for a permanent extension and expansion of the production credit over the next decade.

Some of the most ludicrous opposition is coming from the group of 50 lawmakers who purport to be defending the public purse. Many of their objections would be more appropriately used against the fossil fuel sector. How can they, with integrity, complain about a wind tax credit that was established in 1992, while ignoring fossil fuel tax credits that started creeping up as early as 1916?

The Governors of South Dakota, Iowa, Washington and Oregon have written a joint protest, “While the PTC as currently structured will apply to some wind development beyond this year, the impact of its impending expiration will soon again result in the loss of thousands of jobs as evidenced by plummeting orders for new wind turbines and their component parts in the 39 states that contribute to the wind-equipment supply chain.”

There are thought to be 80,000 people working in the wind industry right now.

Wind Turbines (Click on image to enlarge) – by Iris Goldstein, CC by SA 2.0

Governor Kitzhaber’s energy policy advisor, Margaret Hoffman, pointed out that the wind sector has been bringing in $9 billion each year since 2007.

She added that, “In those instances when it has not been renewed, renewable production has been nearly completely wiped out in the state of Oregon.”

The irony, according to Oregon Live, is that “Wind power has proven unpopular for many residents of Eastern Oregon, who decry the visual blight, the environmental impacts and the massive subsidies taxpayers have provided to developers who sell their energy out of state.”

Similar sentiments have been expressed in communities across the country.

The one I am most familiar with is Ocotillo in Southern California. Most of the inhabitants do not want the giant wind turbines that surround them on three sides. They were built on “public land,” which means the residents have little control over what is happening. The people of Ocotillo have a long list of complaints, one of which is the dust storms that have plagued them since the wind farm was built. (Image at the top of the page and video below)

Why are industrial scale developments like this being forced upon rural communities?

There are more problems.

Alfredo Figueroa standing where the True North geoglyph was destroyed to make way for the Blythe Solar Project – from the movie “Who Are My People?

The photo to the left was taken just after one of the ancient geoglyphs at Blyth was bulldozed in preparation for solar development.

It could just as easily have happened in preparation for a wind farm. The Bureau of Land Management did not accept claims that Ocotillo is a sacred site when the wind farm went in. The California Native American Heritage Commission subsequently recognized it as a sacred Native American cultural landscape and burial ground.

This could not have happened in countries like England, where places like stonehenge are protected.

Why are Native American sites thought to be of such little value?

Illustration courtesy Jim Wiegand

Then there is the fact that the number of raptors killed by wind turbines is obviously far greater than what is being reported. The illustration to the right was supplied by Jim Wiegand of Save the Eagles. He pointed out that while wind turbines have grown four times larger, the search area for dead birds has not been expanded since turbines were 100 feet tall. This means most of the carcasses are being hurled outside the search area. In addition to that, some dead birds are not counted because the search area is square and their corpses do not fall within the grid.

I have been told that at the moment, US wind energy operates at around 32% of capacity. This means that a conventional back-up, usually fossil fueled, is required. I agree with those who say wind turbines must be considered as part of a package, which includes the back-up. This dilutes any value they presently have in reducing CO2 emissions.

That will change.  A “plus storage battery” solution should become more accessible in the near future. The Abengoa solar facility has thermal storage for up to 6 hours of dispatchable energy that can be used if it is cloudy, or at night. We may soon be hearing of facilities that have the capacity to run for 24 hours or longer.

If the industry persists, I suspect there will come a time when all the problems will be overcome.

At the moment, the rapid development of wind technology is being paid for in wrecked human lives.

Similar stories arise from other industrial sectors, like fracking, tar sands oil and clear cutting old growth forests.

So I suspect it is our approach to industry,  more than any individual sector, that is the problem.

It will take a very sharp sword to cut through this knot.

The first step might be deciding what is really more important: the people of Ocotillo? or surrounding them with wind turbines?  The next question is why?

One thought on “The Production Tax Credit is a Modern Day Gordian Knot”

  1. This means that a conventional back-up, usually fossil fueled, is required. I agree with those who say wind turbines must be considered as part of a package, which includes the

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