Sen. Alexander: Double DOE research funding, end wind credit to grow revenues

The 2.2 cent per kilowatt-hour credit for wind power production expires Dec. 31. Supporters are calling for a one-year extension at a cost of $12.1 billion over 10 years.

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Ending the credit would not account for the entire annual research spending increase Alexander seeks, however. He did not elaborate on what else he would cut to shift funding to research.

The American Wind Energy Association and its congressional allies contend the incentive Alexander wants to axe would pull the rug out from under the industry just as its nears self-sufficiency. They also say the credit already bolsters Treasury's coffers, explaining the incentive leverages $15 billion of private investment per year.

But Alexander maintained that other technologies are in greater need of government dollars to reach commercial scale.  

Alexander said that would bring more revenues from economic growth and associated taxation. He said that would improve the nation’s fiscal situation by cutting down the deficit, while also developing clean technology to cut trade imbalances from importing oil.

“The federal government doesn’t spend much money on energy [research],” Alexander said. “It creates a better economy, higher revenues and it reduces the debt.”

DOE spends about $6 billion per year on research and development, according to the White House, though green energy research funding also comes from other federal agencies and the 2009 stilmulus. 

“If you want to sell a lot of those [Nissan] Leafs, the key to that is to get the cost of the car from $30,000 to $20,000,” said Alexander, an electric vehicle advocate whose state hosts a Nissan Leaf manufacturing facility.

Increasing federal research spending was one in a series of policy recommendations for reducing foreign oil dependence in a Securing America’s Future Energy report released Monday.

The report noted the U.S. has amassed a $1.7 trillion deficit in crude oil and petroleum trade since 2007, which accounts for more than half the total trade deficit during that time.

“The excessive reliance on oil exposes the entire economy to the vagaries of the global oil market at a cost that has become increasingly unsustainable. Oil dependence is one of the greatest threats to U.S. national security, and it deeply undermines our ability to achieve and enduring period of American growth and prosperity,” the report said.

The report suggested increasing federal energy research and development spending, especially in the areas of electric vehicles and alternative fuels, such as natural gas and “advanced” biofuels made from non-edible feedstocks.

The Defense Department also should retain the ability to invest in refineries for those advanced biofuels, the report said.

The Senate last week struck language from a defense authorization bill that would have barred the Pentagon from spending on biofuels refineries. It also stripped a provision that prevented the military from buying biofuels if they cost more than petroleum.

The report also recommended expanding drilling on federal onshore and offshore lands in conjunction with stronger regulations.

Sen. Roy Blunt (R-Mo.) said increasing drilling would reduce the deficit by lowering trade deficits with other nations and by creating jobs.

“If there’s an easier formula anywhere in the history of economics than more American energy equals more American jobs, I don’t know what it is,” Blunt said.

The oil-and-gas industry, along with its friends in Congress, has pushed for more drilling access on federal lands, but has resisted stricter drilling rules.

Retired Adm. Dennis C. Blair, who served as National Intelligence director under President Obama, said any expansion of drilling must be balanced with stronger regulations.

“We definitely advocate opening up drilling in the United States where we can, but there’s a very strong part of this report that says that drilling has to be done safely and we know how to do it safely,” Blair said.