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Wind Energy Tax Credit

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. GRASSLEY. Mr. President, first of all, I had an opportunity to hear what Senator Udall of Colorado had to say about Iowa and my participation, and I thank him very much for his kind remarks.

This year Senator Mark Udall is the champion of people speaking about the wind energy tax credit. I have spoken a few times, but he has spoken for every State that has a wind energy business. He has spoken many times more than I have, and I wish to compliment Senator Udall from Colorado for doing that.

I think it is a foregone conclusion that after 20 years' of investment of taxpayer money in what we call the tax incentive for wind energy, and with the industry just about becoming a mature industry--and there are different points of view within the industry, but in just a few years it will be starting to phase out--this wind energy tax credit can go away because it will be a mature industry much as the ethanol tax credit went away at the end of last year. So with this tremendous investment, it seems to me it would be a shame not to continue it so we can get to maturity, and then in a sense ratify the decision of the good investment of taxpayer money that has already been made.

So today it is my privilege to join my colleague, Senator Udall of Colorado, on the floor of the Senate to discuss the importance of wind energy and the need to extend the production tax credit for wind. I appreciate Senator Udall's commitment to the production tax credit for wind energy. As I have said before, but I wish to say it again, he has come to the floor many times during the past several months to highlight the importance of wind energy in the various States. He has been a real leader on this issue.

As Senator Udall has said, I have been a longtime supporter of the wind energy tax credit beginning with my authorship of the first wind production tax credit in 1992. At the time, I have to confess I didn't see coming, for my State or for the Nation as a whole, the big deal it has become not only in the production of wind energy and Iowa being No. 2 in the Nation, but also the component manufacturing that goes on in most every State involved in wind energy, including my own State. Particularly, I didn't foresee, at a time when most of our talk about exporting jobs is actually exporting jobs, and in my State, at least from two countries, Spain and Germany, we have been able to import jobs--or I should say import the ability to create jobs through foreign investment--for the component manufacturing. So it has been a success in so many ways.

Maybe one other point that ought to be emphasized at this time: Some Members--and maybe more Members in the other body--seem to be more cynical about any sort of investment in green energy because of Solyndra and other places where taxpayer money has gone in the way of grants and then there has been immediate bankruptcy, resulting in a waste of taxpayer money. There is absolutely no benefit from the wind energy tax credit unless energy is actually produced. So it is not going to be one of those situations where through taxpayer money, through a tax incentive, money is going to some company and not reaping the benefits of it, the end result in this case being the production of wind energy.

The production tax credit for wind is working and should be a part of the effort in Washington to get more Americans working. Nationally, the wind energy industry supports 75,000 jobs. There are more than 400 manufacturing facilities nationwide supplying wind components. Thirty-five percent of all new electricity generation added during the last 5 years was from wind, and this happens to be more than from coal and nuclear combined. Today, 60 percent of a wind turbine's value is produced in the United States, compared with just 25 percent in the year 2005.

As I have said so often, my home State of Iowa is a leader in wind energy production and component manufacturing. Nearly 20 percent of Iowa's electricity needs are met from wind energy, powering the equivalent of 1 million homes. Almost 3,000 utility-scale turbines in Iowa generate lease payments to landowners, worth $14 million every year. Iowa is behind only Texas nationally in terms of installed wind capacity. The wind energy employs more than 6,000 Iowans. These jobs are at risk because Congress has so far failed to extend the production tax credit which is set to expire at the end of the year.

In fact, hundreds of Iowans employed in wind energy have already been laid off because of slowing demand over uncertainty of tax credits, and there will be more laid off in my State except in one city where they are manufacturing components to go to Canada for use in wind energy in Canada. Certainty about tax policy and affordable energy, then, are factors for economic growth and getting unemployed workers back on the assembly line.

As much energy as possible--both traditional and renewable--should be produced at home to create jobs and strengthen national security. Wind energy is obviously a free resource, and it is abundant in many places around the country. I suppose we could say wind is abundant every place, but at speeds that make the production of energy from wind cost-effective.

In my State, most of these facilities are in northwest Iowa where the wind averages about 14 miles per hour compared to going diagonally down to the southeast corner of the State where it averages about 8 miles per hour. So if there is enough constant wind, this is very definitely a free resource.

Wind is also a homegrown resource. The electricity it generates is produced on local farms for local customers and often adds investment value to the community. A clean, renewable source such as wind is not dependent on faraway countries with leaders, in the case of petroleum, for instance, who happen to be so hostile to the United States even as they take our energy dollars and maybe use those against us. That is why there is broad support for extending this worthwhile policy.

Legislation in the House of Representatives to extend the production tax credit has 119 cosponsors, including 25 Republicans. In August the Senate Finance Committee, with a bipartisan vote, passed my extension of the wind energy production tax credit amendment I offered at that particular time.

The Governors' Wind Energy Coalition and the Western Governors' Association have called for an extension of the production tax credit. The Western Governors' Association is an independent organization representing Governors of 19 States, and current membership includes 13 Republicans and 6 Democratic Governors. So there is pretty broad bipartisan consensus among Governors that this ought to be extended.

I was pleased to join a press conference a few weeks ago with Senator Mark Udall and over 40 military veterans representing Operation Free. They were visiting Capitol Hill to meet with Members of Congress, encouraging Congress to extend the wind production tax credit.

The wind energy production tax credit was created to try to level the playing field with coal-fired and nuclear electricity generation. The production tax credit for wind is available only when wind energy is produced. There is no benefit for simply placing the turbine in the ground. It is a tax relief that rewards results, and that is much different than failed taxpayer-funded grants and loans made since 2009 when a lot of that money went to companies that are now bankrupt.

Those who want to do away with the wind energy tax incentive don't seem to mention that other forms of energy have received far more generous tax incentives for many decades longer than the wind energy industry. Oil and gas and nuclear power all received longstanding Federal support. I wish to emphasize, because I believe I read someplace, that one of the opponents of the wind energy tax credit being extended comes from nuclear.

Do my colleagues think we would even have a nuclear industry in the United States since the 1950s or 1960s if it weren't for the Price Anderson Act that supports it as kind of a super--or an insurer of last resort? It would never have developed, and it is still in existence. Isn't it a little bit intellectually dishonest to say that wind should not have the tax incentive when other industries wouldn't even exist if they hadn't had it already?

If we are going to have a discussion of which industries merit Federal support and which industries don't, the discussion needs to be intellectually honest. If we are having that discussion, everything needs to be on the table, not just wind energy.

Can you think of 60 extenders that are going to sunset at the end of this year? Only one--wind--seems to be attacked right now.

This extension deserves a place in our year-end package of tax extenders to help give confidence investors want and employers need to keep and hire workers.

There is no reason to exacerbate the unemployment problem by failing to extend this successful incentive. America's security in the short- and long-term depends on a robust effort to develop domestic energy sources.

Before I leave the floor, this can be done by the extender bill all by itself being passed or it can be, as we hope, that President Obama and Speaker Boehner have some sort of framework for us to put meat on that framework so we do not go over the cliff and have this bill be a part of it. When that whole fiscal cliff debate is about jobs, we do not want to forget about these 75,000 jobs that are in wind energy. A lot of these jobs have already led to some layoffs. We could bring those people back to work pretty fast.

I yield the floor and suggest the absence of a quorum.

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