Support for the wind-energy production tax credit

Press release:

For Immediate Release
August 2, 2012

Support for the wind-energy production tax credit

M E M O R A N D U M

TO:    Reporters and Editors
RE:    Support for the wind-energy production tax credit
DA:    Thursday, August 2, 2012

Senator Chuck Grassley issued the following comment about the inclusion today of a one-year extension of the wind-energy tax credit in The Family and Business Tax Cut Certainty Act of 2012 reported by the Committee on Finance.  The overall package includes an amendment written by Senator Grassley and accepted this morning as part of the modified proposal of Committee Chairman Max Baucus.

Grassley comment:

“The wind-energy production tax credit is designed to level the playing field for this renewable resource against coal-fired and nuclear electricity generation.  The credit has been successful in developing clean, renewable, domestically produced wind energy and the jobs that go along with it.  The one-year extension approved today would make the credit effective for producers for one more year.  In the face of an effort to end this incentive, I persuaded committee leaders to include the extension in a way that keeps it at full value and that puts the wind-energy production tax credit in a strong position for the floor debate this fall.  No single energy tax incentive should be singled out over others, energy-related and not, before a broad-based tax reform debate.  Congress and the President need to take up tax reform to make American business more competitive with lower rates, a broader tax base, and a simpler code.  Until tax reform is undertaken, workers and employers need certainty in existing tax law.”

Description of the Grassley amendment to The Family and Business Tax Cut Certainty Act of 2012:

Extend for one year, through December 31, 2013, the section 45 production tax credit for wind which expires on December 31, 2012.  Modify placed-in-service date for wind to a “begin construction” rule.

Background information:

Senator Grassley authored the legislation that created the wind-energy production tax credit in 1992 and has won passage of extensions a number of times.

Today, wind-energy production supports 75,000 American jobs and drives as much as $20 billion in private investment.  During the last five years, 35 percent of all new electric generation in the United States was wind.  There are nearly 400 wind-related manufacturing facilities in the United States today, compared with just 30 in 2004.

Conventional energy sources, including oil, gas and nuclear, enjoy countless tax incentives and many of them are permanent law.

Grassley on the President’s Visit to Iowa on Wind Energy

For Immediate Release
May 23, 2012

Grassley on the President’s Visit to Iowa on Wind Energy

Sen. Chuck Grassley of Iowa authored and won enactment of the first-ever wind energy production tax credit in 1992.  The incentive was designed to give wind energy the ability to compete against coal-fired and nuclear energy and helped to launch the wind energy industry.  He has worked to extend the credit ever since.  He made the following comment on President Obama’s visit to Iowa on wind energy this week.

“I’m glad the President likes Iowa but his visit won’t have much to do with getting the wind energy tax credit extended.  He could travel down the street from the White House to the Capitol and talk to the congressional leadership instead, especially in the Senate, controlled by his party.  It was surprising to read in the paper this week that he hasn’t talked to key committee chairmen in his own party in months.  Maybe the lack of communication is why the President and the Senate Democrats let the biodiesel tax credit expire at the end of 2011 and made that industry suffer from uncertain tax policy.

“There’s strong bipartisan support in both the House and the Senate for extending the wind energy tax credit.   I introduced a bill with bipartisan co-sponsors in March, for example.  The provision is hung up in the lack of a way forward on dozens of expiring tax provisions.  The President could exert his leadership by working with Congress on a way forward instead of calling for a provision that’s a no-brainer for many of us.  He’s focusing on the easy part of a bigger task.  The stakes for the wind industry and the country in general will only get worse with delay.    It’s time to act, not politick.”

Information on Grassley’s bipartisan bill to extend the wind energy tax credit is availablehere.

After Three Decades, Federal Tax Credit for Ethanol Expires

The following was gleaned from a January 2 New York Times article with the above title.

The New York Times

Monday, January 02, 2012

After Three Decades, Federal Tax Credit for Ethanol Expires

WASHINGTON — A federal tax credit for ethanol expired on Saturday, ending an era in which the federal government provided more than $20 billion in subsidies for use of the product.

The tax break, created more than 30 years ago, had long seemed untouchable. But in the last year, during which Congress was preoccupied with deficits and debt, it became a symbol of corporate welfare. Fiscal conservatives joined liberal environmentalists to kill it, with help from a diverse coalition of outside groups.

In the United States, most ethanol is produced from corn.

Nearly 40 percent of the United States corn crop goes to ethanol and byproducts, including animal feed.

The tax credit, which cost the government nearly $6 billion in 2011, went to gasoline refiners that mixed ethanol with gasoline.

Senator Dianne Feinstein, Democrat of California, said the ethanol industry had enjoyed “a trifecta, a triple crown” of federal support. Federal law requires that certain minimum amounts of renewable fuels like ethanol be blended into gasoline. Refiners received the tax credit for doing so. And the government imposed a tariff on imported ethanol, protecting the domestic industry.

The tariff, like the tax credit, expired Saturday. But the requirement to use increasing amounts of ethanol in gasoline continues.

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U.S. Companies File Complaint Over China’s Steel Subsidies

The following was gleaned from an article in today's New York Times.  Those counting on a lot of new Green jobs in a new Green economy may want to take note.  Many of those Green jobs are not ending up in the U.S.

The New York Times

Friday, December 30, 2011

U.S. Companies File Complaint Over China’s Steel Subsidies

WASHINGTON — Four domestic companies that make most of the steel towers for wind turbines in the United States filed a trade complaint against China and Vietnam on Thursday, seeking tariffs in the range of 60 percent.

The allegations are much like the ones that solar panel manufacturers made in a similar case filed against Chinese manufacturers in October, namely that government subsidies were allowing foreign manufacturers to sell below cost in the United States, damaging the domestic industry.

The American wind industry is also subsidized, mostly through a production tax credit, but by all accounts the scale of Chinese subsidies is far larger.

The companies bringing the complaint buy high-quality plate steel and cut it so that it forms a slightly conical shape when it is rolled into a cylinder. They weld the long seam in the rolled structures, called cans, and then stack the cans to form taller units, each with a flange at top and bottom. The units are shipped to wind farms where they are bolted together to form a tower. Towers can reach 300 feet and weigh 350 tons, and the largest ones sell in the range of $600,000, a price largely determined by the price of steel.

The industry installed about 2,900 towers in 2010 and probably more in 2011.

Imports of towers from Vietnam and China roughly doubled in 2011, according to Alan H. Price, a lawyer at the firm that filed the case, Wiley Rein, which also filed the solar panel case. At one of the companies he represents, Katana Summit, an executive said that imports had been taking market share for the last several years and now had about half the market.

The complaint seeks duties of more than 64 percent on Chinese imports, and more than 59 percent for Vietnamese imports.

The case was filed by the Wind Tower Trade Coalition — comprising Trinity Structural Towers, DMI Industries, Katana Summit and Broadwind Energy — at the Commerce Department, which has 20 days to decide whether to initiate an investigation. In addition, another government agency, the International Trade Commission, will hold a hearing in about three weeks to decide whether there is reasonable indication that the domestic industry is suffering from the imports or is under threat from them. It should reach a preliminary determination in 45 days. If the commission says there is an indication of a threat, the Commerce Department would reach a preliminary determination within six months on whether the two countries are guilty of dumping. At that point, duties could be imposed.

A final determination would take about a year, if the wind coalition wins all the earlier rounds.

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