Joe Manchin saved US taxpayers $300 billion by rejecting bad climate policy
Joe Manchin did Americans a big favor last week by pulling his support for a bill that included some $300 billion in subsidies for solar and wind power and electric cars. Indeed, the Democratic senator from West Virginia spared taxpayers from wasting money on the same misguided energy policies that have resulted in what Britain’s Global Warming Policy Foundation rightly calls “Europe’s worst energy cost and security crisis since the Second World War.”
Manchin’s move is also a win against corporate welfare and a win for rural America. Of course, that’s not what you’ve likely heard.
Former Obama adviser, John Podesta, indulged in some world-class hyperbole, saying it was “odd that Manchin would choose as his legacy to be the one man who single-handedly doomed humanity.” In an opinion piece published by the New York Times, Leah Stokes, an assistant professor at the University of California, Santa Barbara, personally attacked Manchin, saying she has “never understood” how Manchin “looks his grandchildren in the eye. … His legacy is climate destruction.”
These hollow attacks on Manchin are happening at the same moment that Europe is in the midst of a crisis that was caused by the same energy policies that the NGO-corporate-congressional-climate complex wants to impose on American consumers. What Podesta, Stokes and their allies on the left refuse to see (or acknowledge) is that Manchin was correct to reject the green corporatism and unilateral energy disarmament that has put Europe on the precipice of disaster. The causes of Europe’s crisis are obvious: too much spending on weather-dependent renewables, too little spending on hydrocarbon production, too much reliance on imported energy, and the closure of too many coal and nuclear plants.
Last month, Reuters reported that German consumers “could see a doubling or tripling of their energy costs, which in some cases are already between 30 percent and 80 percent higher due to price increases from last fall.” In Britain, residential customers are paying about 43 percent more for their household energy than they were last year and prices are expected to jump another 65 percent in October.
In a report released last week, John Constable, the director of energy at the Global Warming Policy Foundation, found that between 2008 and 2021, the European Union spent around $781 billion on renewable-energy subsidies, and those subsidies continue to add some $70 billion to consumers’ bills every year. The EU’s energy policies, he said, have been an “unmitigated disaster” that have resulted in “high energy prices and dramatically falling energy consumption suggesting societal and real economic decay.”
Manchin’s veto is a vote against the corporate welfare that has been driving solar and wind energy deployment in the U.S. According to data from the Treasury Department, credits for wind and solar are the most expensive energy-related provisions in the tax code. Between 2021 and 2031, the investment tax credit (ITC), used by the solar industry, will cost federal taxpayers about $60 billion. The production tax credit (PTC), which expired at the beginning of this year and is used by the wind industry, will cost nearly $53 billion. For comparison, the oil and gas sector will get about $29 billion in tax credits and the nuclear sector will get $3.4 billion.
But those numbers don’t tell the whole story. An “apples-to-apples” comparison shows that last year, the solar sector got 267 times more in federal tax credits per unit of energy produced than the nuclear industry. The wind energy sector got 99 times more.
This is lunacy. There is no way to reduce our greenhouse gas emissions without nuclear energy — and lots of it. And yet, the tax code is punishing nuclear power. In the past 15 months alone, two nuclear plants — Palisades in Michigan, and Indian Point in New York — were prematurely shuttered. There are several reasons why those plants were closed but one of the biggest ones is that tax policy is so skewed toward solar and wind.
Indeed, the ITC and PTC, a temporary program that has been extended 13 times, have become a favored tax-avoidance scheme for corporate America. NextEra Energy, the world’s biggest producer of renewable energy, has feasted on the PTC. In its latest 10-K filing, the company reported nearly $4.3 billion in federal tax credit carry-forwards that it can use to reduce its future tax liabilities. Berkshire Hathaway Energy (BHE), a subsidiary of Berkshire Hathaway, and a major developer of wind and solar projects in Iowa and other states, has collected about $2.7 billion in tax credits over the past three years. A note to the company’s latest financial statement says that the $2.7 billion “includes significant production tax credits from wind-powered electricity generation.”
Machin’s move also will slow the assault on rural America, which has been fighting back against the federally subsidized, landscape-blighting sprawl that Big Wind and Big Solar have been inflicting on small towns and counties across the country for a decade. In their effort to collect more federal tax credits, companies have been using hardball legal tactics against rural communities. NextEra, for example, has sued several small towns including Hinton, Okla. MidAmerica sued Madison County, Iowa, the province known for its wooden bridges, to force the county to accept dozens of turbines it doesn’t want.
As can be seen in the Renewable Rejection Database, over the past nine years, some 344 communities from Maine to Hawaii have rejected or restricted wind projects. Solar projects are also facing increasing resistance, particularly in the Midwest. Last month, the town of Christiana, Wisc. sued the state Public Service Commission over its approval of a 300-megawatt solar project that would cover some 2,300 acres in the county with solar panels. An article by Wisconsin Public Radio quoted one local resident, Tara Vasby, who said the proposed project is “too big for this community. … .It’s not the right size for this community and this area.”
The punchline here is obvious: Manchin was right to reject the failed policies that are now immiserating European consumers. Further, while climate activists want to demonize Manchin, their anger is misplaced. They simply didn’t have enough votes on Capitol Hill to force their agenda through. On Monday, I spoke to Emmet Penney, the editor of the newsletter Grid Brief, who summed up the situation perfectly: “If you have all the big climate NGOs, the Democratic Party, and the entire Washington green lobby on your side and you can’t get your climate bill past one dude from West Virginia, you deserve to lose.”
Robert Bryce is the host of the “Power Hungry Podcast,” executive producer of the documentary, “Juice: How Electricity Explains the World,” and the author of six books, including most recently, “A Question of Power: Electricity and the Wealth of Nations.” Follow him on Twitter @pwrhungry.
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