Uncertain Times for Renewable Energy: The Congressional Tussle Over The Renewable Energy Act

While in last week's post, "The Sahara Forest Project: Oasis,or Mirage?" I chose to cover The Sahara Forest Project, a largely conceptual sustainable development project with political and environmental implications, this week I chose to focus attention on the current congressional
conflict over the bill H.R. 7060. This piece of legislation, also known as The Renewable Energy Act and Job Creation Tax Act of 2008, seeks to provide $17 billion for renewable energy industries, most notably concerning those involving solar and wind. While the bill does benefit the oil industry by providing tax credits for heavy oil refineries, it is a piece of legislation that is extremely beneficial and important to the sustainability of renewable energy industries. Most notably, it extends the existence of Investment Tax Credits, considered pivotal to the sustainability of the solar industry. Despite the positive contributions this bill provides, it is currently under debate by members of the House and Senate. The bill, covered by news website Bloomberg, passed by the Senate last week by a 93-2 vote margin. It was then passed by the House by a 257-166 vote margin. Significantly however, amendments were made and have thereby stalled the bill's progress (see linked graphic above).

After perusing the blogosphere, I came upon several reputable blogs detailing coverage of the bill that compelled me to respond to their posts. The first of these posts came from Gristmill, a well-regarded environmental news blog. The post, titled House vs. Senate, was written by Kate Sheppard, a D.C.-based political reporter that writes not only for Gristmill, but also for other well-known media outlets such as The Guardian and MSN. I wrote a comment on Ms. Sheppard's post, as I found it to be a well written account of not only the benefits outlined within Renewable Energy Act, but also the influential role interest groups play in passing legislation. Her apt usage of quotes from members of the House are also effective in providing understanding as to why there is considerable disagreement over certain elements concerning the bill. Another blog post I came upon was found on Matternetwork, a news and blog website which promotes and provides awareness for sustainable ideas and practices. The post, titled House Fully Funds Renewable Energy Act, Possibly Sinking It, was written by Susan Kraemer, a correspondent for Matternetwork. She has written numerous postings that have received a high volume of web hits. I commented on Ms. Kraemer's post because I found her critique of the bill's current status to be a bit more argumentative. Her exasperated account of the hurdles facing the passage of the bill reveal how bipartisan our politics can be, while furthermore revealing how imperative The Renewable Energy Act is for the sustaining the advancement of
renewable energy industries. Ms. Kraemer ends her post with an interesting and informative excerpt from House Speaker Nancy Pelosi's website (see linked graphic to the right).

Many, including myself, worry that the House and Senate will continue to fight over provisions of the bill, including most importantly whom will foot the bill. These delays, in tandem with our country’s current dismal economic outlook, make it look as though the bill will not pass before the end of the year, ringing a death Nell to companies involved in sustainable energy. While my commentary is available under the comments section of each blog, I have also provided them below.

"House vs. Senate"
Comment:

Thank you for your concise, yet informative coverage of the ongoing legislative battle to pass the Renewable Energy and Job Creation Tax Act of 2008. H.R. 7060 is a bill that I feel is of seminal importance to both our Nation's economy and security, as incentives for the growth of renewable energy can provide jobs and lessen our dependence on foreign oil. It is indeed frustrating that the bill passed through the Senate earlier last week but was then revised by the House. This is especially true since it was emphasized by the bill's proponents in the Senate that the bill pass without amendments. I agree with your conclusion that given this obvious roadblock, it is indeed unclear as to what the future holds for this bill. This is especially true given the nature of our economy's financial crisis.

The proposed $17 billion for the energy tax measure is a relatively small figure for spending when compared to the proposed $700 billion to resuscitate our failing financial institutions. The American economy is indeed in trouble, but there is a distinct possibility that providing funding for renewable energy industries would help prop up our economy. It was reported by Bloomberg correspondent Daniel Whitten that solar companies such as First solar Inc. and Suntech Power Holdings Co. would "create 441,000 permanent jobs and inject $232 billion in new spending into the economy by 2016." These are significant growth figures. We should be learning from the mistakes that brought us into our financial crisis. There must be greater emphasis on Green-tech and alternative energy companies within the American economy.

It is disappointing to see a piece of legislation with such promise look as though it may be shot down as a result of squabbling over who will bear the bill's cost. I find it disheartening that interest groups have such influence over matters imperative to both our economy and the environment. For instance, the objection to scaling back tax breaks for oil companies with foreign interests as a way to pay for renewable energy credits was obviously a reflection of House Republican's defense of their oil lobbyist's interests.

I hope that despite the focus on the proposal to spend $700 billion to bail out our financial institutions, the Senate and House can come to an agreement that will support and advance the renewable energy industry. If passing this legislation does not happen by the end of the year, the investment tax credits will expire, almost certainly crippling companies devoted to the advancement of renewable energies such as solar and wind.

"House Fully Funds Renewable Energy Act, Possibly Sinking it"
Comment:

I enjoyed your insight regarding the current status of the Renewable Energy Act, a piece of legislation that I find important to the support and advancement of the renewable energy industry. I agree with you that the amendment by the House may indeed cripple successful passing of the bill. As you intimated, it was a shrewd move by the Senate to combine the bill with aid for disaster victims affected by Hurricane Ike. Pragmatic decisions such as these provide for successful legislation. I feel that this was a diplomatic move emphasizing compromise, not a subversive tactic meant to strong-arm renewable energy legislation into being passed. However, members of the House evidently did not perceive it this way, as they extracted the two provisions into two separate bills. I believe that this was an unwise move, for packaging the funding this way would be a way in which both taxpayers could benefit from the Renewable Energy Act and citizens affected by the hurricane could receive aid.

Yet as you intimated, ultimately the struggle over passing the Renewable Energy Act may be irrelevant, as it is ultimately contingent on President Bush signing the bill into action. As you stated, he is not in favor of the Senate's request to fund the bill in a manner that would impact oil companies. I think that this is a travesty, considering that the bill only lessens subsidies for oil companies involved in overseas investment. This does not mean these companies would be taxed; rather, they simply would not benefit as much from their interests in foreign ventures. I feel that this is a small price to pay for the advancement and support of a growing renewable energy industry. In fact, to ensure long-term viability, energy companies heavily involved in oil should be looking to invest in renewable technologies as oil market instability continues and supply reportedly shrinks.

Failure to pass this bill would result in the expiration of Investment Tax Credits (ITCs), which provide incentive for investment in technologies such as solar, arguably the most successful renewable energy developed so far. If these were to expire, progress in this industry would be stifled. Many companies, including GE, have stated that their continued operations are largely contingent on the 8-year extension of ITCs provided by the Renewable Energy Act. These companies would then have to seek out other sources of funding, a gloomy prospect given our nation's current financial situation. Thus, government funding in the form of the Renewable Energy Act appears to be the most economically viable solution for the continued development of renewable energy industries- industries which possess tremendous growth potential and are thus vital to our nation's troubled economy.