Commentary: Wind power tax credit should expire

The Kansas City StarMarch 27, 2012 

Gov. Sam Brownback and U.S. Sen. Jerry Moran, both Republicans of Kansas, should know better. They teamed up recently on a piece for The Star supporting renewal of the federal wind-energy production tax credit, which expires at the end of this year.

The article assured readers that continuing the subsidy would not be an attempt to “pick winners and losers” and that the wind industry only needs a bit more time to become competitive. The subsidies, they wrote, aren’t cash handouts. They’re “reductions in taxes that help cover the cost of doing business.”

The latter point is pure eyewash. From the point of view of the budget, tax credits are the same as spending money. Either way, the treasury is short the cash.

Brownback gets a cheer from this corner for his audacious tax-reform plan, which would carve out loopholes and cut rates for individual taxpayers — and boost the state’s ability to draw capital and create jobs.

But wind power is another boondoggle, meaning: Congress is picking winners and losers. Wind may have its place in our energy portfolio, but that place can’t be large without a large amount of waste.

Like solar, wind isn’t readily scalable. It uses enormous amounts of land to produce relatively small amounts of energy from an intermittent source at very high capital costs.

Like a sick patient dependent on perpetual transfusions, wind is never likely to become competitive — especially in an era of falling natural gas prices. Gas is a much more cost-effective and environmentally friendly way to produce electricity.

Wind has been subsidized since the early 1990s. Whenever the giveaways expire, as in 1999, 2001 and 2003, wind-farm construction plummets. Wind farms get a 2.2-cent per kilowatt hour production tax credit. If that goes away as expected, construction will drop again.

“The wind industry is a creature of subsidies,” Robert Bryce of the Manhattan Institute (New York) writes in an email. “Without them, the industry would quickly wither.”

In his 2010 book, “Power Hungry,” Bryce points out that Texas is No. 6 globally in wind-power production capacity, but the agency that runs the state’s power grid says only 8.7 percent of that capacity is dependable during peak periods. Wind power must be backed up by conventional power, which means wind does little to reduce carbon emissions.

Around the world, the green bubble of alternative energy is popping. Germany is phasing out solar subsidies because they caused consumers’ power bills to explode. Britain’s carbon-reduction program, which relies heavily on wind, has jacked up electric bills so much that “fuel poverty” has become a chronic issue.

A recent report by the KPMG accounting firm said scrapping expensive wind farms and shifting to natural gas and nuclear power would save every Briton nearly $870 a year.

Then there’s the aesthetic concern, which ought to matter in Kansas. Several years ago, a plan to scatter wind turbines in the Flint Hills tallgrass prairie region sparked determined opposition. It’s not hard to understand why.

The dominant aesthetic of the high plains is an endless-sky, top-of-the-world feeling. That feeling vanishes when you see a crowd of monstrous windmills in the distance, waving their arms like idiotic zombies.

Wind power is horizon blight.

It’s also what economists call rent-seeking. Profits are what you get when businesses produce something of value and sell enough to cover expenses, with something left over. “Rents” are what you get when you’re a political crony and you convince the government to take money from others and give it to you. The country would be better off with fewer rent-seekers feeding on the federal budget.

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