THE COMING FIGHT FOR NEW ENERGY

Energy industry braces for cuts
Darren Samuelsohn, January 31, 2011 (Politico)

"Energy interests of all stripes are on alert to defend their share of tax breaks, loan guarantees and other financial sweeteners amid growing calls to slash spending…[I]ndustry groups and their lobbyists are calling in their chits in what’s sure to be a highly competitive war, pitting region against region and energy resource against energy resource…President Barack Obama, congressional leaders, rank-and-file lawmakers and even some clean energy technology mavens have made it clear in recent weeks that there are no sacred cows anymore when it comes to cutting…

"In his State of the Union speech…[President Obama] repeated a call he’s made the past two years for the elimination of billions of dollars in tax breaks for oil companies…House Republicans have their own targets…including billions of dollars in Energy Department research, vehicle, fuels, weatherization and energy efficiency programs…"

From the Environmental Law Institute via the Washington Post - click to enlarge

"Clashes over energy subsidies will come all year, starting with Obama’s 2012 budget request and efforts by Congress to address the recommendations of the president’s debt reduction commission…[and going to] the inevitable year-end rush to extend tax breaks, including a production credit that wind, solar and geothermal project managers consider a short-term lifeline…[T]he uncertainty is not helpful for businesses trying to map out investments…

"…[E]nergy lobbyists are pushing back with warnings that too much tinkering with the status quo will force them to lay off workers and halt projects that are helping get the economy back on its feet…[Elimination of] the oil and gas industry’s tax breaks…twice went nowhere in a Democratic-controlled Congress…While they do record large profits, [advocates say] oil and gas companies also are big taxpayers at $95 million a day…

"Wind and solar are fighting their own two-front battle to stay afloat. They’re looking for Congress to give them long-term certainty with a program that would set a goal for ramping up renewables over the next 25 years, somewhat akin to the ‘clean energy’ standard Obama touted [in the SOTU]…They’re also trying to get more than just a one-year extension of the Treasury Department production tax credit. Lawmakers scrambled at the end of last year to put a patch on the breaks through the end of 2011, but that’s not enough to give project managers certainty for long-term planning…"

click to enlarge

"Calls to slash subsidies could come down to powerful allies on Capitol Hill. Coal officials cite support from Senate Minority Leader Mitch McConnell (R-Ky.) and the Obama administration, which wants to spend hundreds of millions of dollars on 10 carbon capture and storage plants…Ethanol advocates know the presidential campaign is right around the corner…[and expect] Obama and some of his GOP rivals won’t be…willing to tweak the voters of crucial farm and rural states…[S]olar advocates got a shout-out during the State of the Union…[S]ome House freshmen said they’re ready to cut energy spending, even if it means going against the grain back home…"

[Jeffrey Leonard, founder/chief executive, Global Environment Fund (allied with United Nations and World Bank energy and climate change efforts):] “[Energy subsidies are] the sordid legacy of more than 60 years of politics as usual in Washington…[E]liminate them all — for oil, coal, gas, nuclear, ethanol, even for wind and solar…[Because renewables] get only the tiniest sliver of the overall subsidy pie, they’ll have a competitive advantage in the long term if all subsidies, including the huge ones for fossil fuels, are eliminated…And with anti-pork tea partiers loose in Washington and deficit cutting in the air, it’s not as politically inconceivable as you might think.”