Sanders aims to eliminate fossil support, extend renewable tax credits
Sanders’ bill would eliminate a broad swath of tax benefits for oil and natural gas companies while extending renewable energy tax credits through 2020 — longer than even some renewable industry officials think those credits will be necessary.
The “Sustainable Energy Act,” S. 239, is separate from the carbon tax bill Sanders also introduced alongside Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) at a news conference yesterday (Greenwire, Feb. 14).
But it echoes similar themes of increasing the price of fossil fuels while supporting cleaner technologies. The bill contains provisions from legislation Sanders co-sponsored last year with Rep. Keith Ellison (D-Minn.) to eliminate virtually all government support for fossil fuels, including tax breaks, direct spending on research and development and oil spill damage caps. It also increases royalties for coal mining and oil and gas drilling on federal lands and waters (E&ENews PM, May 10).
The bill introduced yesterday also extends the production and investment tax credits through 2020 and funds five years of clean energy manufacturing tax credits. The production tax credit is currently in place for wind, geothermal, biomass, waste-to-energy and hydropower projects that begin construction before the end of this year. The investment credit, which primarily benefits solar developers, is in place through 2016.
The longer-term fate of both of those credits is likely to be addressed in comprehensive tax reform that lawmakers and the Obama administration say they want to tackle in the coming years. But it seems unlikely that either would be extended for as long a period as Sanders is proposing.
Solar energy costs have fallen sharply in recent years, leading some independent experts to suggest that the industry is on the brink of being able to thrive without any subsidy. And the wind industry has floated a plan that would have its tax credit phased out after 2018 (E&E Daily, Dec. 13, 2012).