Tax subsidies are a wildly popular way for Congress to dish out money, because they have an indirect, backdoor quality. But make no mistake: If you cut Exxon-Mobil’s taxes by $100 million, the effect is exactly the same as writing a check – the oil company is richer and the government poorer.
So when free-market advocates say we shouldn’t be picking favorites by extending tax credits to emerging energy technologies like wind power, we should bear in mind that our government has already picked Big Oil as a favorite, with obscure deductions for “intangible drilling costs,” “tertiary injectants” and the “percentage depletion allowance” that might as well be handouts every year, straight from our taxpayer pockets to theirs.
Back in March of 2012, the U.S. Senate briefly took up the Repeal Big Oil Tax Subsidies Act. That bill, sponsored by Sen. Robert Menendez of New Jersey, would have ended the subsidies of nearly $5 billion per year that our biggest oil companies are enjoying even as they pocket massive profits in this era of $100-per-barrel oil and $4-per-gallon gasoline.
The Senate, voting mainly along partisan lines, failed to muster the 60 votes it needed to move forward on the bill, which also would have extended a critical support for emerging energy technologies, the Production Tax Credit. Over the past decade, Congress has repeatedly allowed the PTC to expire and then renewed it, creating an environment so uncertain that large manufacturers are afraid to tool up new factories to build things like wind turbines. The on-again, off-again nature of the Production Tax Credit is a big reason why, when American firms do build wind farms, they have to use so many European parts.
Against this backdrop of government subsidies for oil, of entirely unconvincing support for renewable energy investment, and of mounting evidence that climate change is a looming crisis created by our use of fossil fuels, a battle has played out now for more than a dozen years over the proposed Cape Wind project on Horseshoe Shoal. With 130 turbines, each of them 440 feet high, the project would send up to 420 megawatts of electricity into the Cape Cod power grid.
Depending on whether you read Cape Wind’s website or the pronouncements of their primary opponents, the Alliance to Protect Nantucket Sound, the Horseshoe Shoal wind project promises either to “gracefully harness the wind” while reducing greenhouse gas emissions by 734,000 tons per year, or to desecrate the Sound’s pristine environment with a noxious industrial development.
The Alliance, with lavish backing from Bill Koch, the multi-billionaire who makes his money in the fossil fuel business, has thrown every argument it can think of at the Cape Wind project over the past decade, from manipulated images that exaggerated the view of the turbines from shore to Native American protestations that the shoal is sacred ground. Most recently, the Alliance has seized upon an argument most of us would agree is more reasonable: that the cost of the energy Cape Wind proposes to supply is simply too high.
Now, I’m not convinced that Cape Wind is the right project in the right place, but I am sure that as we move toward the day when our energy comes from clean sources, we have to be prepared to pay more — especially in these early years as fledgling technologies mature. And I am sure we need to remember that fossil fuels, however cheap they might seem today, come with the hidden costs of environmental damage that our children and grandchildren will someday have to pay.
Sam Feldman of Chilmark, a man whose energy and initiative I greatly admire, once told me that one of his guiding principles is “ready, fire, aim.” Rather than analyze everything to death, he said, he prefers to get right to work: throw a solution out there and improve it as you go along. I recall his principle in the context of Cape Wind because the story of this project is the absolute antithesis of Mr. Feldman’s philosophy – it’s more a case of “ready, aim, aim, aim.”
In my reference room at the Edgartown Library is a shelf groaning with studies of the Cape Wind project that must weigh close to 20 pounds. The vetting this project has been subjected to at state and federal levels is equaled only by the quantity of lawsuits, many of them frivolous, that the Alliance and other groups have launched against Cape Wind.
When Commonwealth Magazine interviewed Bill Koch in February, asking him about his strategies for stopping Cape Wind, he said: “One is to just delay, delay, delay, which we’re doing. . . The other way is to elect politicians who understand how foolhardy alternative energy is.”
His paid mouthpiece, Audra Parker of the Alliance, naturally puts things in a greener, more palatable way, declaring: “We support renewable energy including offshore wind, but appropriately sited and without being an excessive burden to ratepayers.”
In the end, if the Cape Wind turbine project ends up not being built, I won’t be crying bitter tears of disappointment. I certainly won’t be joining in the opponents’ victory parties. However this story plays out, we’ll look back on it someday as a lesson in how difficult it was to change our ways of thinking about energy, and as an example of how hard the old-guard magnates of fossil fuel fought to protect their status quo.