“The legislation will offer tax credits for wind energy without the cap that the House is trying to impose again this year. It will extend the small producers’ ethanol production tax credit and the excise tax credit and bring the expiration date in line with other expiration dates to ensure that it will be able to be extended without interruption. The bill will encourage the latest technology to meet the nation’s energy needs so we can become more energy independent. This is part of an overall balanced energy policy and it should be part of an energy bill that also expands domestic energy production in a meaningful way. No stone should be left unturned in our effort to secure a stable and sustainable energy supply.”
The senator provides a nice description of a bill, but not this one. While the Energy Independence and Investment Act of 2008 does address some energy issues, it falls far short of moving the country towards energy independence. The energy language in this bill is limited to alternative energy sources. It extends and expands the tax credits for wind, solar, refined coal, marine and biomass based energy sources. The bill expands a 50% tax credit for the cost of facilities to produce cellulosic ethanol, and extends and expands a tax credit in the amount of 30% of property value (capped at $30,000) credit for installing alternative fuel pumps and electric vehicle recharge stations. Finally, at the request of Senator Tom Harkin (D-IA), the bill also provides tax incentives to create a dedicated ethanol pipeline.
It is true that a few of these provisions have the potential to reduce the demand for foreign oil slightly, but most of these provisions will simply replace domestically mined coal with other domestically generated power sources. This leads me to believe that this bill is not focused on reducing our demand for foreign oil, but to appease the environmentalist lobby. This is supported by many additional environmental handouts. The bill provides funding for carbon capture and sequestration projects, creates a new CO2 capture credit, and instructs the Secretary of the Treasury to request the National Academy of Sciences to undertake a comprehensive review of the tax code to determine its impact on carbon and greenhouse gases. The bill also creates Energy Conservation Bonds to be used by states, tribes, and municipalities, provides tax credits to improve the energy efficiency of homes and commercial buildings, and extends tax credits for purchasing energy-efficient appliances. Not one of these provisions will impact our use of foreign oil.
This legislation does not reduce the demand for foreign oil in a significant manner, and in fact it actually has the potential to reduce domestic oil and natural gas production. The tax breaks in this bill are being paid for on the back of the oil and gas industries. It eliminates or reduces tax deductions for some oil companies, places an excise tax on oil and natural gas produced on certain federal lands in the Gulf of Mexico, and increases the oil spill trust fund tax! More than seventy percent of the revenue offsets in this bill are from the domestic oil and natural gas industries.
The bill also includes a number of unrelated provisions including language to make the Black Lung Disability Trust Fund solvent, to provide funding to refund an unconstitutoional coal export excise tax to exporters, and allow individuals whose livelihood was negatively impacted by the Exxon Valdez accident to spread their settlement over three years for tax purposes and make contributions from this settlement into retirement accounts. The bill also reauthorizes the Secure Rural Schools program and redefines a qualifying child for tax purposes. These provisions clutter the bill and distract form the important issue that the bill should address, energy independence.
I don’t want it to be misunderstood, I am not anti-environmentalist. I support reasonable energy conservation efforts, anti-sprawl efforts, and market driven pollution reduction efforts. But, I do not support environmental handouts cloaked as an energy bill. We need real energy reform in this country. We should explore alternative energy options including wind, solar, and biofuels, but we absolutely need to pursue the expansion of domestic oil, natural gas, and nuclear energy production. Senator Grassley suggests that this bill is part of “an overall balanced energy policy,” but where is this policy? And, why does this bill seem to undermine the expansion of domestic oil production which will continue to be an essential part of our energy policy for many years to come?
Senator Grassley, it is time for a real energy policy.
Greg ForbesEditor, grassleywatch.com
Originally posted 09/17/2008 on Grassley Watch