BUDGET DEFICIT REDUCTION SUPER COMMITTEE COMMENTS

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ILLINOIS WIND WATCH

STANDING UP FOR SMART ENERGY POLICIES

COMMENTS SUBMITTED TO THE BUDGET DEFICIT REDUCTION SUPER COMMITTEE

Nov. 7, 2011

The following comments are being submitted on behalf of the citizens of Illinois Wind Watch.  IWW is a group of Illinois citizens and regional citizens’ groups that promote responsible wind energy.  We also work with citizens and scientists in Indiana, Wisconsin, Iowa, Ohio, California, North Carolina and Canada.  To learn more about IWW, go to www.illinoiswindwatch.com.   We would be happy to provide testimony on any aspect of wind energy if you ever hold hearings on the impacts of this industry.  These comments and suggestions are being addressed to the Deficit Reduction Super Committee, the House Committee on Energy and Commerce, the Senate Committee on Energy and Natural Resources, the House Committee on the Budget, and the Appropriations Committee of both chambers.   This letter will also be posted on our website for better readability and easier access to the sources cited.

EXECUTIVE SUMMARY

We can SAVE at least $6 billion per year in subsidies and unleash real job creation by eliminating subsidies and preferences for renewable energy.  In the last three years, the subsidies for wind increased 10-fold.  See the Energy Information Administration’s 2010 analysis of energy subsidies:  http://www.instituteforenergyresearch.org/2011/08/03/eia-releases-new-subsidy-report-subsidies-for-renewables-increase-186-percent/The evidence against wind and solar energy is now overwhelming, coming from every part of the globe where these unproven technologies have been tried.  These expensive subsidies and preferences are unfair, unaffordable and unnecessary to achieve our nation’s energy goals.  Consider the following:

>>  Wind is not “green”; it doesn’t reduce the grid’s carbon output.

>>  Wind and solar are not affordable.  They are a drain on our economy.

>>  Wind energy incentives kill more permanent jobs than they create.

>>   Renewable energy represents an unacceptable level of financial risk.

Not Green, Not Clean

In real life, wind farms do not reduce the carbon emissions of the grid.  See http://www.forbes.com/2011/07/19/wind-energy-carbon.html.  Industry estimates do not take into account the side effects of wind’s intermittent nature.  In addition, since global warming is a global issue, the efficacy of our energy policy must be judged on a global basis.  Moving American manufacturing jobs to China only increases global environmental impacts because China has less stringent environmental regulations than we do.  We are sacrificing jobs but making no difference in terms of global environmental impact.  Moreover, the extreme environmental impact of China’s unrestrained mining for the rare earths ore needed for turbines raises issues of international social justicehttp://www.dailymail.co.uk/home/moslive/article-1350811/In-China-true-cost-Britains-clean-green-wind-power-experiment-Pollution-disastrous-scale.html.  Our current energy policy is unlikely to result in any future improvement because the trend in global energy usage shows that electric power generation by Western countries is a small and declining proportion of world carbon emissions.  http://illinoiswindwatch.com/wp-content/uploads/2011/02/BinderClearTab-NoCarbonEmissionReduction.pdf (p.1).  The carnage of migratory and protected birds (including eagles and other raptors) and bats that control pest insect populations is often overlooked, but this aspect of wind energy is far from “green.”  Assuming anthropogenic climate disruption is scientifically confirmed, we desperately need to find more effective ways to prevent or prepare for climate change.   If we bet all our chips on the wrong technology now, we will find ourselves financially and technologically unable to respond later if the need becomes critical.

Not Cheap, Not Free

Wind and solar are the most expensive sources of electricity.  Recent comparisons by the Energy Information Administration demonstrate that the actual per kWh cost of wind is extremely high.  On a per megawatt hour basis, the federal government provided the natural gas electric energy sector $0.64 in support while wind got $56.29 and wind got a whopping $775.64 for the same amount of energy generated.  See report by Energy Information Administration at http://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf (see chart below).  A compendium of information on cost can be found at http://illinoiswindwatch.com/wp-content/uploads/2011/02/BinderOrangeTab-ExpensiveGreenEnergy2.pdf.   Many states have adopted a Renewable Portfolio Standard (RPS) that also props up this industry by forcing utilities to buy this particular source of energy or obtain “credits” to demonstrate indirect financial support of renewables.  These costs are then passed on to consumers and, more importantly, to our manufacturing industries and businesses, who then raise prices and pass it on to consumers who never know how much renewable energy is hitting their pocketbook.  This hurts both job creators and consumers who are already stressed by the economic slowdown.

http://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf .  For a complete listing of the all the incentives being made available to the wind industry, see http://www.dsireusa.org .  Despite being provided government preferences and subsidies at almost every stage of their business, the wind industry is still asking for more handouts both here and abroad.

No Jobs

Very few permanent “green” jobs are created and many traditional jobs are destroyed by forcing a transition to inefficient and highly expensive renewable energy.  According to official records of the Illinois Department of Economic Opportunity, even using unaudited job reports, wind farms create very, very, VERY few jobs.   Taxpayers are shelling out about $8 million per job. http://illinoiswindwatch.com/.  This mirrors similar studies done all over the nation and in Europe.  Subsidizing renewable energy creates a temporary bubble of temporary jobs while destroying mainstream jobs.  Subsidies are creating jobs in China and India, while damaging the economy of the United States.

No Reason to Repeat Europe’s Mistakes

After 30 years and billions and billions of euros in subsidies and tariffs, many nations of the European Union are starting to back away from wind energy for the aforementioned reasons, but mainly because raising the cost of energy has damaged their economies.   We should not repeat their mistakes.  See http://illinoiswindwatch.com/wp-content/uploads/2011/02/BinderYellowTab-EuropeanExperience.pdf.

Financially Risky

The Solyndra scandal and other recent renewable failures have highlighted the inherent risk of investing in an unprofitable technology.  In the case of wind, the companies have structured contracts in a way that suggests that reorganization may be part of their business plan.  The parent companies do business through numerous limited liability companies, insulating the rest of the corporate structure from liability to the locals.  Based on testimony in zoning hearings and a review of wind lease agreements, the long-term contracts of the wind subsidiaries appear to be structured to harvest most of the profits up front while they defer their long-term liabilities 50 to 70 years into the future.  Prior to the Stimulus, wind companies often sold the future stream of tax credits soon after a project was approved, before it was even built.  Reportedly, Chase and Citigroup were doing such deals.  Since the stimulus bill, however, the companies often prefer Section 1603 no-strings-attached immediate cash grants over the production tax credits (PTCs) option.  As you read this, the U.S. Treasury is busily writing checks for billions of dollars.  http://www.govexec.com/dailyfed/0911/091611nj-energy-loans.htm.  Lawmakers on both sides of the aisle have known for years that this program was seriously flawed, see http://schumer.senate.gov/new_website/record.cfm?id=319695, but the hemorrhage continues.  When the big upfront revenues end and the ongoing liabilities continue, if revenues don’t cover the significant long-term liabilities, these firms would seem likely to declare bankruptcy.  We understand that at that point, bankruptcy law will trump private agreements with schools, landowners and counties.  We further understand that such executory contracts can be assumed or rejected, depending on whether they represent a net asset or liability to the company.  In addition, government loan guarantees under Section 1705 have short-circuited the normal credit risk review process, leaving the American taxpayer holding the bag.  Thus, the public is borrowing billions to support the industry, but gets absolutely no assurance that the company will achieve carbon reductions, create jobs or even be open for business six months later.

The solution is a free market transition to NATURAL GAS.

The smart energy choice is natural gas.  Most experts believe that this is a no-brainer.  http://www.newgeography.com/content/002509-gas-against-wind.  We would have to build natural gas plants all over the place in order to balance the ebb and flow of wind energy and provide backup for the hot summer days when the wind doesn’t blow.  The irony is that such gas plants could supply all the power needed without any help from wind.  Such development would create good jobs and trigger economic booms wherever natural gas deposits have been found.   The natural gas industry needs NO federal subsidy or regulatory market forcing in order to replace dirtier forms of energy.  And such plants could be built locally where power is used, avoiding the need to build expensive transcontinental power lines.   We have abundant domestic gas reserves that will provide a secure and clean source of energy for centuries, giving our scientists plenty of time to look for viable non-fossil options.   Venture capitalists are already on top of this.  http://venturebeat.com/2010/12/03/will-the-rise-of-natural-gas-threaten-solar-and-wind/.

CONCLUSION

We should not be borrowing billions of dollars from China to buy Chinese wind turbines and solar panels that DO NOT achieve our goals.  All subsidies and preferences for renewables can be eliminated from the federal government, thereby saving billions.  This would stimulate real economic growth and eliminate green “bubbles” based on hype and hope.  It is just plain wrong to saddle our children with debt and leave them with an inadequate energy infrastructure.  For the sake of our children’s future, please make these cuts now.  Thank you for your consideration.

Resources:

Excellent Overview (Concise, Clear, and Critical):  A good explanation of key policy issues:  http://docs.wind-watch.org/Rational-Look-Renewables.pdf.  One can quibble about the author’s capacity factor but even if you grant the industry a higher capacity factor, the conclusion remains the same:  renewables are a bad deal on every metric.

Comprehensive collections of wind-related facts and testimonies:

National:  http://www.windaction.org/ and http://www.wind-watch.org/.

Regional:  http://betterplan.squarespace.com/  (Wisconsin)

Science & Engineering:

http://windpowerfacts.info/ (John Droz, Jr.)

http://www.palmettoenergy.org/ (George Taylor, principal)

http://www.masterresource.org/.

Wind Victim testimonies:  Too many to list.  You can go to Youtube and search for “wind turbine victim.”  There are reports from the distressed victims of Big Wind from all over the globe.  Two from Illinois by people we know:  http://lifewithdekalbturbines.blogspot.com/; http://nowindfarms.com/blog/.

 

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