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Don't Stop Renewable Energy Subsidies. Just Make Them Better.

Don't Stop Renewable Energy Subsidies. Just Make Them Better.

Every week, managing editor Patrick Williams disappears into his office and reemerges a cranky, nicotine-addicted, third-person-referring superhero we like to call Buzz.

OK, everybody relax and just breathe easy (though not too deeply). That whole global-warming, energy-supply, sooty-air thing is taken care of.

We know this because unlike many, many, many of you, we read The Dallas Morning News, and there on Monday they said so, sort of, in their lead editorial. "Now is a good time to break the tax-credit habit," read the sub-headline on the piece, which was about how the wind energy industry should end its dependence on a federal production tax credit. That 2.2-cent per kilowatt-hour credit, which received a one-year extension from Congress during the fiscal cliff battle at the end of last year, has helped boost wind production in Texas to about 10 percent of average usage over the past 10 years. That number's expected to climb in the future, so, the News concludes, it's time for wind to get off Uncle Sam's teat.

Now, a reasonable person might suggest that's a bit like saying, "Hey, you've made it 10 percent of the way up this cliff with a rope, so now it's time to let go." Of course, reasonable people probably didn't read the News' editorial, which as an aside notes that "since 1950, 70 percent of all energy subsidies went to fossil fuels."

Well, maybe. Toting up exactly who gets how much federal support in the energy industry is a complex task, and the answer you get varies based on who's doing the counting and how you define a subsidy. We checked various sources, and the cost of just coal to the public purse apparently ranges somewhere between $1.something billion and $345 billion annually. (The latter number came from Harvard, but they were counting "hidden" costs, like death and environmental pillaging. Pinkos.) The point is, if you're going to start kicking energy subsidies, there are much bigger targets.

Of course, there are also better ways of providing tax support to renewable energy -- not that the News mentioned those -- like allowing investors to form things called master limited partnerships, which offer tax benefits that encourage investment. Right now, renewable energy projects can't form MLPs. Fossil fuel projects can. (Surprise!)

A good free-market conservative might suggest that the government should just get out of the energy business and stop trying to pick winners and losers. Reality would suggest that's never going to happen and perhaps government influence in shaping our national infrastructure is not always a bad thing. The oil, gas and railroad industries probably wouldn't disagree, at least not with a straight face.

Jeff Clark, executive director of The Wind Coalition, a wind-power advocacy group, told us that declaring the energy playing field level and calling on wind power to go out and make it on its own might be a bit premature. "We need some permanence in the tax code," Clark said, instead of relying on variable breezes from Washington. Coal has been subsidized for 200 years, oil for 100 years and nuclear since its inception, he added. "The support we receive helps level the playing field."


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