THE VINE SEPTEMBER 29, 2008
While the bailout is (rightfully) getting all the coverage, Kate Sheppard reports that, lest anyone forget, the moratoriums (moratoria?) on offshore and oil-shale drilling are officially set to expire at midnight tomorrow. Congress just approved an interim spending bill that will get the federal government through the year and won't contain any limits on oil production—essentially, Dems let the ban expire and got nothing in return. Well played as always. Now, this doesn't mean we'll actually see new drilling anytime soon. Rules need to be set, leases sold off, lawsuits sorted through—that whole process will take years, and some Democrats think they can put the moratorium back in place next year.
Potentially more worrisome, though, is the story Joe Romm flags here: Both the House and Senate have passed tax packages that would extend the production credits for wind, biomass, geothermal, and solar projects. (The Senate also has incentives for dirtier sources like oil shale and liquefied coal.) But the two chambers are still wrangling over how to pay for thing—the House wants to offset all the spending with tax hikes on oil companies; the Senate and White House only want to offset part of the spending—and those disputes could scuttle the thing entirely.
That… wouldn't be good. Production tax credits certainly aren't the best or most efficient way to stimulate renewable energy—for the reasons Paul Gipe explains here—but there's good reason to think that the U.S. wind and solar industries, which are booming right now, really could collapse without subsidies. As a New York Times story on offshore wind in Delaware explains, most large wind projects in the United States still can't get financing without the tax credit. Yes, it's a handout, and often to big companies like GE, but as long as the externalities from burning fossil fuels remain untaxed, clean energy isn't going to spring up out of nowhere on its own.
Update: Okay, as everyone now knows, the bailout bill got whacked down by the House this afternoon, so there's plenty of chaos afoot, but—and not to be too myopic or anything—as Kate Galbraith points out, this could keep lawmakers in session longer (the House was planning to adjourn on Monday), which may provide extra time to hash out an energy compromise and prevent renewable industries from imploding, too. Still, the odds are looking slimmer by the hour.