A Free-Market Energy Blog

American Wind Industry Association: Circling the Wagons

By Thomas Stacy II -- August 8, 2011

Until the end of 2010, the American Wind Energy Association’s annual reports were in the public domain. The details of their business now go to members only.

What has changed? What information has the lobby organization decided to share only with insiders? And why?

A look at some of AWEA’s slanted and aggressive one liners, such as August 4th’s Continued Growth Depends on Consistent Tax Policy, is revealing. Make no mistake–the fate of the industry is not in the hands of consumers as it is with virtually all other goods and services in our economy. It is wholly government dependent. And in terms of the paramount budget debate, wind power is not viable without exemption from its American duty to help reduce our national debt.

AWEA’s predicament has lead them to simultaneously threaten and beg Congress. “Project activity and orders for 2013 and beyond are scant because of the lack of a predictable business environment, causing layoffs and even bankruptcies in American manufacturing plants and the supply chain,” said AWEA. “These struggles for U.S. wind manufacturers will only worsen if Congress were to allow the tax credit to expire.”

Recently, I told my 10-year old daughter that she had to clean up her room before having friends over to play.  Her response reminds me of AWEA’s threat/plea to Congress: “Daddy, if you don’t let me have a friend over this weekend, I’LL NEVER CLEAN MY ROOM AGAIN!”  What’s a father – or a Congress – to do?

And more from last week’s press release: Clearly Congress cannot take for granted all the wind energy manufacturing and construction jobs that have been a bright spot through the recession.”

The nineteenth century classical liberal political economist Frédéric  Bastiat would not be impressed, and neither should be Congress.

1603 Grants: Government Spending, Deficit Inflation

AWEA head Denise Bode slaps away the gloom with wishful, illusory thinking: However, wind tax credits enjoy broad bipartisan support, and since they’re not spending programs, current projects are safe and prospects for extension of the Production Tax Credit beyond 2012 are good!

Excuse me, Ms. Bode, but you lobbied hard to turn the renewable energy production tax credit (PTC) into the 1603 grant program – one part of the infamous stimulus package. So now, almost a year and a half before that spending program sunsets whereby revertion to the PTC automatically occurs, you point out that the PTC isn’t spending?

Americans know that tax credits lower federal revenue, and “spending program” like the 1603 grant option means spending that revenue on a no-value proposition. Wind tax credits or spending programs both mean higher national debt, and hard working taxpayers shouldering the wind industry’s share of the burden to pay it off. The more AWEA talks, the less trustworthy they appear to be.

Lobbyists use the above bandwagon effect to try to create momentum for an otherwise shallow argument. But this old trick will not go far in the new reality of a credit-downgrated United States government.

Invoking George W. Bush

And if that isn’t enough to cause a fight to break out between the Tea Party and Congressional RINOs, Bode states: “[W]ind energy remains ahead of schedule to generate 20 percent of America’s electricity by 2030, the goal identified by the U.S. Department of Energy (DOE) under the George W. Bush Administration.”

We all know Dub-ya was a crony capitalist’s dream president, right?  That’s the kind of thing true conservatives loath and Democrats rightly latch onto when disparaging the other team.  Maybe Democrat Senator Sherrod Brown and I can agree on something – importing wind turbines hinders our economy more than importing oil does.

And it was then-governor George W. who signed Texas’s 1999 electricity restructuring bill that was part of Enron’s rescue of the U.S. wind industry. Ken Lay’s ghost was somewhere near Anaheim, California that May evening when Jay Leno regaled the crowd at AWEA’s WINDPOWER 2011 celebration dinner.

But the 20% by 2030 wind goal deserves a little more attention.  Since wind energy output is so uneven, we ultimately need more flexible generators to “even it out,” as the American Tradition Institute clearly describes. This is not a way to wean our nation off of fossil fuels, but rather locks us into even more natural gas energy for the long term–and at the expense, probably, of plentiful, low-cost coal. That leaves us with more questions.

Wind in the Context of Natural Gas

Is forcing coal out in favor of natural gas a good thing? And if it is, wouldn’t it be simpler, cheaper, and more environmentally friendly to just replace coal with gas in whatever way the market (or know-it-all energy planners) decides?

We certainly don’t need wind energy to do that, but wind energy does lock us into at least two parts gas energy for every one part wind energy – just to make a steady output of dependable, controlled power. And we’d have to keep burning it even if its price headed north again – not an implausible scenario given its historical price record.

And while we are extrapolating down the uncertain road of our energy future, let’s remember that 20% wind would mean at least 40% more gas energy ( or some other less economically viable storage or leveling mechanism) to create a stabilized wind product that could replace coal. That’s on top of the 20% gas energy we use now for demand balancing and some base load.

Along with the heavy dependence on flexible fossil gas – making us sensitive to its potential price volatility – we need to recognize that the 60% gas 20% wind future leaves no room for emissions-free nuclear growth from an environmental perspective–-the one choice really available for climate alarmists given nuclear’s large economies of scale and proven duration.

But AWEA will have none of it: “Since 2007, wind energy has installed 35 percent of America’s new electrical generating capacity, more than twice coal and nuclear combined,” they say. But this is just an admission that unwarranted and unprecedented subsidies are making wind profitable enough to grow even when demand for electricity isn’t growing.

If we don’t NEED new power plants, then why are we using American taxpayer dollars to build them?  Oh that’s right – JOBS! Government jobs–the broken window kind.

You, my precious Bastiat, I so miss….


  1. Ray  

    Bastiat pointed out that when people become addicted to plunder they promote it as a public good.


  2. Tom Stacy  

    I think our fine fleet of lobbyists has progressed to the point where they promote things as public good first – as justification for future plunder. The problem is that government does not know how to spell “value” let alone know how measure it “for us.”


Leave a Reply