The integration of renewable energy sources like wind and solar into the nation’s electricity supply is an important Smart Grid capability. Solar and wind are intermittent energy sources that need energy storage to guarantee electricity when needed, but the sun will continue to shine, and the wind continue to blow, regardless of politics. Increased electricity production using clean renewable energy sources will also enable an infrastructure that supports electric vehicles (EVs). That means the decreased reliance on oil for our national transportation needs. The political turmoil roiling the Middle East and Northern Africa are potent reminders of the volatility of the supply and price of oil, and the negative impacts these have to our economy. And the integration of renewable energy sources to the grid and the electrification of transportation have the added benefit of reducing CO2 emissions.
There’s much irrationality in the recently passed HR 1, including cuts totaling $899M in Energy Efficiency and Renewable Energy and $49M in Electricity Delivery and Energy Reliability. There was one small ray of hope about sustaining some semblance of a forward-looking Federal energy policy in an amendment to HR 1, but much more to cheer if HR 601, the End Big Oil Tax Subsidies Act of 2011 wins passage.
Amendment 31 to the recently passed HR 1 spared ARPA-E from being defunded. ARPA-E, the Advanced Research Projects Agency – Energy provides much needed funding for “transformational energy research” in new energy technologies such as energy storage solutions. ARPA-E is part of the Department of Energy, and Secretary Steven Chu has been a strong supporter of energy research in technologies that expand use of renewable energy sources into the nation’s electrical grid. These investments will result in increased national energy security and global climate security by reducing reliance on fossil fuels. Votes to eliminate funding are really votes to maintain the status quo – reliance on volatile oil markets and decreased energy and economic security.
HR 601 would put some rationality back into our tax code as well as encourage sensible energy policies that build our domestic energy security. It would repeal 10 of the biggest taxpayer giveaways to large multinational fossil fuel companies. These provisions would not apply to small, independent companies unless they make over $50M in the tax year.
The multiple subsidies for fossil fuels have been written as permanent provisions in the tax code. In contrast, subsidies for renewable energy are time-limited. This means they come up for support again and again, and deny these new (and ultimately, much more secure domestic sources of energy) the market certainty that the investment community wants to see. Other fossil fuel subsidies are in the form of direct spending to aid R&D. Some estimates indicate that between 2002 and 2008, tax breaks and funding to aid fossil fuel companies has totaled over $70.2B. Us long-suffering taxpayers can’t afford this sort of generosity, especially considering that over the past decade, the five biggest oil companies – BP, Chevron, ConocoPhillips, ExxonMobil, and Shell – have enjoyed profits of almost one trillion dollars. We would be much better served to see these subsidies recovered as revenue and invest at least some of it on the domestic energy sources and Smart Grid technologies of the future. HR 601 is a great start to restore some rationality to the nation’s tax code and budget, and can help redirect our focus to building a national energy security policy for the future.