The oil and gas industry has gotten its way in Washington for decades, thanks to favorable tax policy and gentler climate regulation than in many other developed nations. That joyride may be ending.
Democratic Sen. Ron Wyden of Oregon unveiled legislation on April 21 that would repeal longstanding tax breaks for the oil and gas industry and replace them with new ones that would incentivize clean energy. Wyden’s bill meshes with President Biden’s broad climate plan and other legislation meant to put the Biden plan into action.
Fossil fuel producers benefit from some tax incentives passed in the industry’s early days, to foster domestic energy production, and others that apply to manufacturing overall but benefit drillers in particular. The Tax Policy Center estimates those tax breaks are worth about $2.3 billion per year. Environmental groups put the value at $20 billion or more.
There are tax breaks for clean energy production too, but unlike the fossil-fuel tax breaks, clean-energy incentives tend to phase out once certain targets are met or get repealed as control of Congress changes. “We want the same kind of long-term incentives the fossil fuel sector has enjoyed for a long time,†says Gregory Wetstone, CEO of the American Council on Renewable Energy, a trade group. “Investors in the renewable sector should know the incentives are going to be there. Businesses want stability.â€
The Wyden bill is “technology neutral,†meaning it doesn’t directly single out wind or solar or any energy source for tax breaks. Instead, there would be tax credits for any power production with zero carbon emissions. That clearly favors renewable energy sources such as wind and solar that don’t involve burning carbon. But a natural gas facility could hit the target too, if it deployed technology able to capture as much carbon as it emits.
There would be another tax credit for domestically produced transportation fuel that’s at least 25% cleaner than average. A third tax credit would apply to efficient homes and commercial buildings. And there would be new and extended incentives for consumers and businesses buying electric vehicles. Those four sets of tax breaks would replace roughly 40 other energy-related tax incentives Congress has passed over the decades, consolidating and simplifying a ganglion of tax laws that for now are incompatible with Biden’s goal of sharply reducing carbon emissions.
Net zero by 2050
Biden’s goal is to reach net-zero carbon emissions in the power sector, which accounts for 28% of the country’s greenhouse gas emissions, by 2035. There might still be some fossil fuel use that emits carbon, but that would be offset by technology that removes carbon from the atmosphere, for “net zero†emissions. Biden wants the entire economy, including transportation, to be net-zero by 2050. https://finance.yahoo.com/news/the-war-on-big-oil-has-begun-191208624.htmlNo economic justifications, just needed to save Mother Earth and line the pockets of renewable energy promoters who donate to the Democrat party.
I cannot say enough about how stupid and bone-headed this is.
