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Wednesday, July 04, 2012

Lobbying Power

I do not really study American politics and lobbying, but this tidbit from a year- old Time magazine (June 20, 2011) recently caught my attention:
...the fossil-fuel industries are lobbying Congress hard to block any legislation that would impose federal standards for renewable energy or diminish their special status. This includes $5.5 billion each year in tax breaks and discounted royalty payments as a result of $200 million in lobbying and political contributions. By contrast, the clean-energy lobby, which includes wind and solar, spent $30.7 million in 2010.
Wind energy, which currently makes up just 2.4% of the U.S. energy grid, has received some fairly significant subsidies in recent years.  Indeed, earlier in the article, the journalist pointed out that Spanish energy company "Iberdrola received over $1 billion in cash grants from the U.S. Treasury" as part of the Obama stimulus plan. 
According to the National Journal, the renewable energy industry received in total about $7 billion in "tax credits and grants for energy from solar, wind, geothermal, and ethanol." Those have now mostly expired, I think.

Unfortunately, green energy subsidies have not been popular in the new "tea party" Congress, partly as a result of the half billion lost in the Solyndra deal.  As the NY Times  reported in late January:
As of early this year, the cash-grant program, known as the 1603 program, had awarded $1.76 billion for more than 22,000 solar projects, according to the Treasury Department.
The Obama administration supported an extension of a tax credit plan that would have provided another  $6.8 billion from 2011-2015. Of course, these policies are being framed around jobs more than the environmental or geopolitical implications:
“Because of federal investments, renewable energy use — sources like wind and solar — has nearly doubled,” Mr. Obama said at a stop at Buckley Air Force Base in Aurora, Colo., where he promoted the increasing use of renewable power by the military and repeated a call for Congress to approve the tax credits. “Thousands of Americans have jobs because of those efforts.”
One-third of the growth in renewable energy in recent years has been in wind power. Solar has also grown quickly, but it is still relatively expensive in the face of cheap coal. In any case, it would appear that even modest lobbying can be effective if the audience is receptive to the requests. Perhaps the fossil fuel industry spends so much because most politicians realize that the subsidies are bad policy. 


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