does the ptc make sense (executive version)?

Does The

PTCMake Sense?

Alliance For Wise Energy Decisions8/21/12

(Executive Version)

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Does The Production Tax Credit (PTC) Make Sense?This “Executive Version” is a VERY abbreviated edition of the more detailed “Professional Version” — which is intended for Congressional Staffers and citizens with energy knowledge. References and credits are on the last three slides of the Professional Version.

The wind energy Production Tax Credit (PTC) has now been in existence for some twenty (20) years.

The Energy Policy Act of 1992 originally enacted the Production Tax Credit and the first lapse came in June 1999. The PTC was extended in December 1999 until December 31, 2001. Once again the PTC expired in December 2001 and was not enacted again until March 2002 where it was then extended for another two years. At the end of 2003 the PTC expired for a third time until a one year extension was granted in October 2004. The PTC was extended through 2005 and also expanded the different types of renewable energies that would be included under the bill. The Energy Policy Act of 2005 (H.R. 6) modified the credit and extended it through the end of 2007. In December 2006, the PTC was extended for another year by the Tax Relief and Health Care Act of 2006 (H.R. 6111). The PTC was extended yet again by the American Recovery and Reinvestment Act of 2009 (H.R. 1). The Wind PTC was extended an additional two years, expiring the end of 2012.

Every time the plea is that just a few more years will be necessary to get wind energy on its feet…

Our underlying message is that our energy decisions should be made on the basis of sound SCIENCE — not on what lobbyists say.

Hopefully you have already been to the “WindPowerFacts.Info” website, which has a collection of good reports on wind energy.

The future of this issue lies in whether or not citizens are properly educated about basic energy matters. After getting more up-to-speed, they need to do some Critical Thinking about this matter.

After citizens get more informed — and do some Critical Thinking — they will be in a much better position to express their more informed wishes to their federal representatives.

Anyone trying to educate their local citizenry and representatives, is welcome to use the material found here. In you have any questions after you go through this, we will be glad to respond to any emails you send to the PTCFacts.Info website.

If you like what you see, please pass it on to other open-minded people, plus your federal representatives.

— ENJOY!

Alliance for Wise Energy Decisions

— Outline of this Presentation —

1 - Rationale for the PTC by its Advocates2 - Are Job Claims Accurate?3 - The Cost Per Job?4 - The NET Jobs picture.5 - Even More About Jobs.6 - The NET Economics picture?7 - What do Utility Companies Say?8 - Some Other Supporter Claims. — CONCLUSIONS —

Part 1:Benefits Claimed by Lobbyists

DOES EXTENDING THE PTC MAKE SENSE?

The Claimed Benefitsfor wind energy subsidies

have radically evolvedover the last twenty years.

20 Specious Claims:How the supposed

Benefits ofWind Energy

have continued to evolve, as they are proven to be false.

The Wind Lobbyists’ Current Major Excusefor the PTC to be extended

are purported JOBs.

How do lobbyiststake advantage

of good legislators?

1 - By telling them what they want to hear, and 2 - by counting on the fact that few will take the time to really check things out!

They also know that

there isno penalty for making unscientific

claims.

In short, our position is that — 1) we do have environmental and energy issues, and

2) these matters should be solved scientifically.

The Soundbite:Wind Energy = High Cost, Low Benefits

— THE TAKEAWAY —Since there are no scientifically proven

net Technical, or net Economic,or net Environmental benefits for wind energy —the lobbyists are hanging their hat on JOB claims.

Part 1:Benefits Claimed by Lobbyists?

Part 2:Are Job Claims Accurate?

DOES EXTENDING THE PTC MAKE SENSE?

Independent StudiesHave Concluded:

Wind Job Claims are Exaggerated

Fact:Almost all US Wind Job Claims come from One Source: AWEA

(Wind Industry Lobbyists —whose job is to hype their industry).

AWEA: the PTC is needed to “...save 37,000 jobs...”

A Sample Independent Study

Do Real World Facts Correlate with AWEA Claims?

— THE TAKEAWAY —Job claims from wind industry lobbyists

have very little credibility.Independent assessments have concluded

that they are wildly exaggerated.

Part 2:Are Job Claims Accurate?

Part 3:Cost Per Job?

DOES EXTENDING THE PTC MAKE SENSE?

Every Independent StudyHas Concludedthe Same Thing:

The Cost Per Job is OUTRAGEOUS!

The Congressional Figures

$12.2 Billion / 37,000 jobs= $330,000 per wind job

A Sample Independent Study

$1,600,000per wind job

A Sample Independent Study

$34,000,000per wind job

— THE TAKEAWAY —No matter how it is calculated,

the cost per wind job is extraordinarily excessive.

Part 3:Cost Per Wind Job?

Part 4:What are the Net Jobs?

DOES EXTENDING THE PTC MAKE SENSE?

Almost AllIndependent Studies

Have Concludedthe Same Thing:

Wind Energy is a NET Jobs Loser

No Jobs claim has any meritunless it accurately considers the NET impact.

In their claims, there is zero evidence that AWEAhas burdened themselves with this obligation.

Indisputable Jobs Fact

Independent Wind Jobs Study

Conclusion: Net is 30,000±

jobs years LOST

(again due to a single offshore wind project).

Offshore Jobs Conclusions of Independent Experts:

OK, Offshore Wind Clearly Resultsin Net Job Losses.

What about Onshore Wind?

(Other Offshore wind studies are cited in the Professional Version.)

SAME THING!

When the big picture is objectively examined, a typical Onshore Wind Project

will be an annual NET JOBS LOSER!

(The details are explained in the Professional Version.)

(Several other Independent wind job studies are cited in the Professional Version.)

Jobs Conclusions of this Independent Expert:

— THE TAKEAWAY —In the typical case,

wind development & subsidy is a NET JOBS LOSER.

Remember: “NET” is a critical job indicator.

Part 4:Net Jobs

Part 5:Even More About Jobs

DOES EXTENDING THE PTC MAKE SENSE?

The fact isThat there is a lot more

to the job claims,than is immediately obvious.

(Several other perspectives about wind job are cited in the Professional Version.)

Another Perspective on Claimed Wind Jobs

There is nothing — no program, no hobby, no vice, no crime —that does not create jobs. For example, tsunamis,

computer viruses and robbing convenience store clerksall create jobs.

So since that claim applies to allit is an argument in favor of none!

Instead of providing evidence of the merits of an enterprise, a jobs claim is

a de facto admission that one has a specious case.— energy attorney Chris Horner

Another Perspective on Claimed Wind Jobs

A top governmentofficial makes

a very blunt statement.Tax credits

don’t create wind jobs.

Another Perspective on Claimed Wind Jobs

If Congress is determined to spend the $12.2 Billionthat just a one year PTC extension would cost,

an important question is:

What would be the job (and other) benefits of spendingthat same amount on another energy source?

According to the Congressional Budget Officeif the same $12.2 Billion were given to the gas industry,

over 9 times as many jobs would be created.

Another Perspective on Claimed Wind Jobs

Another Perspective on Claimed Wind Jobs

Less Expensive Energyis a Proven Way

to create net jobs.

Subsidizing expensive energy is a counterproductive strategy

— THE TAKEAWAY —The jobs argument is a public relations ploy

to distract us from the realitythat wind energy is a very poor energy option.

Part 5:Even More About Jobs

Part 6:Net Economic Impact?

DOES EXTENDING THE PTC MAKE SENSE?

Almost AllIndependent Studies

Have Concludedthe Same Thing:

Wind Energy is a NET Economics Loser

Sample Wind Economics Study

$1,080,000,000

Conclusion: over $1 Billion lost in one year alone!

Economic Conclusions of these Independent Experts:

Conclusion: More $ Hundreds of Millions lost!

Economic Conclusions of these Independent Experts:

In one county,property owners

will LOSE

$640,000,000±in real estate value!

Economic Conclusions of these Independent Experts:

OK, Offshore Wind Also Resultsin Net Economic Losses.

What about Onshore Wind?

(Other Offshore wind studies are cited in the Professional Version.)

SAME THING!

When the big picture is objectively examined, a typical Onshore Wind Project

will be an annual NET ECONOMICS LOSER!

(The details are explained in the Professional Version.)

And There’s More.

The Professional Versionhas 8 extra slides that identify

Some ADDITIONAL Economic Costs.

Almost none of these are normally includedwhen the cost of wind energy

is being presented.

In ADDITION to generous Federal subsidies (like the PTC),many states offer financial incentives for wind power, like:

1. Personal Tax Incentives 2. Corporate Tax Incentives 3. Sales Tax Incentives 4. Property Tax Incentives 5. Rebates 6. Grants 7. Loans 8. Industry Support 9. Bonds, and 10. Production Incentives.

On top of these financial incentives, state and local governments have established rules,regulations and policies (like RPS), with the purpose of encouraging or mandating the

development and increased sale and consumption of energy from renewable sources.

Yet all this still isn’t enough???

E-V-E-R-Y-T-H-I-N-Gabout Wind Energy economics

is problematic!

— THE TAKEAWAY —In the typical case,

wind development is a NET ECONOMICS LOSER.

Remember: “NET” is a critical economics indicator.

Part 6:Net Economics

Part 7:What Do Utility Companies Say?

DOES EXTENDING THE PTC MAKE SENSE?

Utility Companies are regulated by the government.

As such they avoid saying anythingthat is not “politically correct”.

Despite this constraintthe TRUTH has a way of coming out.

“Families would have to get used to only using power

when it was available, rather than constantly.”

When National Grid’s CEO was challenged about integrating wind energy, he said:

A major utility executive’svery disturbing assessment

“In the simplest of terms, special interest groups

and wind developers are asking you to pay more

for a less reliable product. And that just isn’t right.”

One of a series of ads from Idaho Power

More real world evidencefrom utility experts,about the real cost of

wind energy. They say:onshore = 2-3 times moreoffshore = 4-5 times more

Note: this does NOT includethe extra cost of the PTC!

Regarding wind subsidies, the CEO of Ohio’s North Central Electric Cooperative says:

This is the most advanced Utility Company reporton wind energy, ever published.

Regarding jobs and economics, this study says:

— THE TAKEAWAY —When utility companies have the courage

to speak honestly about industrial wind energy,they are against it.

Part 7:What Do Utility Companies Say?

(There are several other Utility comments cited in the Professional Version.)

Part 8:Some Other Supporter Claims

DOES EXTENDING THE PTC MAKE SENSE?

Even though JOBS is their main argument for the PTC,

some other assertionsare periodically made...

“The PTC is not Another Solyndra.”

Objective perspective:That is correct — it’s much worse.

Per government figures, Solyndra cost taxpayers $0.5± Billion.A one year extension of the PTC will cost taxpayers $12.2 Billion.

Another justification put forward for the PTC:

“Some manufacturing jobs will be lost.”

Objective perspective:That is correct — but that’s life.

Modernization is continually making certain products out-dated, which means jobs in those industries are lost.

Should taxpayers be subsidizing the jobs for those producing B&W TVs, 8-track tapes, horse carriages, hoola-hoops, etc?

Another justification put forward for the PTC:

“Some landowners are making big profits.”

Objective perspective:That is correct — but at whose expense?

Another justification put forward for the PTC:

Other justifications put forward for the PTC:

“The Wind industry needs to have certainty.”“The PTC needs to be phased out.”

Objective perspective:Both are correct — and both are already done.

— THE TAKEAWAY —When looking at the BIG PICTURE

these claims do NOT justify a PTC extension.

Part 8:Some Other Supporter Claims

(Other supporter claims are cited in the Professional Version.)

CONCLUSIONS

DOES EXTENDING THE PTC MAKE SENSE?

* “Specialists term these synthetic government spending programs ʻtax expenditures.ʼ Tax expenditures are really spending programs, not tax rollbacks, because the missing tax revenues must be financed by more taxes on somebody else. Like any other form of deficit spending … a targeted tax break coupled with a specific revenue ʻpayforʼ means that one group of Americans is required to pay (in the form of higher taxes) for a subsidy to be delivered to others through the mechanism of the tax system.”

—Dr. Edward D. Kleinbard,Professor of Law at the Gould School of Law, UCLA

Attention Republicans:A PTC for 2013+ is a new TAX*

as such it violates the ATR Pledge

Attention Democrats:

A PTC for 2013+ is a TAX BREAK,that will primarily be usedby High-Income Taxpayers.

As such it is a violationof your party’s campaign for Tax Fairness.

Is an “All of the Above” Energy Policy wise?

Only if it makes sense to include:unreliable,

expensive, andenvironmentally destructive energy options!

We need an “All of the Sensible” Energy Policy.

Wind Energy is a net jobs loser and a net economics loser,that has no scientific proof that it has any

net technical, economic or environmental benefits.

Why should US taxpayers pay for such a charade?

— Conclusions —

The wind PTCmakes as much sense

as the government subsidizing ranchers

to have cows runin the Kentucky Derby.