[I've clipped the beginning part of it in which Friedman talks about McCain's and Clinton's proposals to cut the federal 18.4 ¢ gasoline tax for the summertime driving period and how that is money laundering that will shift our debt further to China, ship it to Saudi Arabia and contribute further to global warming. Click on the title link to read the entire article.]
We have no energy strategy. If you are going to use tax policy to shape energy strategy then you want to raise taxes on the things you want to discourage — gasoline consumption and gas-guzzling cars — and you want to lower taxes on the things you want to encourage — new, renewable energy technologies. We are doing just the opposite.
Are you sitting down?
Few Americans know it, but for almost a year now, Congress has been bickering over whether and how to renew the investment tax credit to stimulate investment in solar energy and the production tax credit to encourage investment in wind energy. The bickering has been so poisonous that when Congress passed the 2007 energy bill last December, it failed to extend any stimulus for wind and solar energy production. Oil and gas kept all their credits, but those for wind and solar have been left to expire this December. I am not making this up. At a time when we should be throwing everything into clean power innovation, we are squabbling over pennies.
These credits are critical because they ensure that if oil prices slip back down again — which often happens — investments in wind and solar would still be profitable. That’s how you launch a new energy technology and help it achieve scale, so it can compete without subsidies.
The Democrats wanted the wind and solar credits to be paid for by taking away tax credits from the oil industry. President Bush said he would veto that. Neither side would back down, and Mr. Bush — showing not one iota of leadership — refused to get all the adults together in a room and work out a compromise. Stalemate. Meanwhile, Germany has a 20-year solar incentive program; Japan 12 years. Ours, at best, run two years.
“It’s a disaster,” says Michael Polsky, founder of Invenergy, one of the biggest wind-power developers in America. “Wind is a very capital-intensive industry, and financial institutions are not ready to take ‘Congressional risk.’ They say if you don’t get the [production tax credit] we will not lend you the money to buy more turbines and build projects.”
It is also alarming, says Rhone Resch, the president of the Solar Energy Industries Association, that the U.S. has reached a point “where the priorities of Congress could become so distorted by politics” that it would turn its back on the next great global industry — clean power — “but that’s exactly what is happening.” If the wind and solar credits expire, said Resch, the impact in just 2009 would be more than 100,000 jobs either lost or not created in these industries, and $20 billion worth of investments that won’t be made.
While all the presidential candidates were railing about lost manufacturing jobs in Ohio, no one noticed that America’s premier solar company, First Solar, from Toledo, Ohio, was opening its newest factory in the former East Germany — 540 high-paying engineering jobs — because Germany has created a booming solar market and America has not.
In 1997, said Resch, America was the leader in solar energy technology, with 40 percent of global solar production. “Last year, we were less than 8 percent, and even most of that was manufacturing for overseas markets.”
The McCain-Clinton proposal is a reminder to me that the biggest energy crisis we have in our country today is the energy to be serious — the energy to do big things in a sustained, focused and intelligent way. We are in the midst of a national political brownout.
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Meanwhile, the Dutch have been using windpower for centuries. I chose to put up the De Valk windmill in Leiden, a windmill I visited 37 years ago when I spent the summer with my cousins who were living in nearby Voorschoten.
From Virtual Tourist:
Once upon a time there were 19 windmills built on the city walls of Leiden, a wonderful view and landmark for travellers, but only De Valk is still standing today. The present mill has had two predecessors. In 1611, the post mill 'De Valck' was built upon the Valkenburger bulwark and later made way for a wooden tower mill in 1667. In 1743, the city council granted permission for the construction of an even taller tower mill but this time made of stone. This is the current 29-metre high mill known as 'De Valk', the body of which took only three months to build. The mill used no fewer than four millstones which provided considerable capacity. As a result of the depopulation of Leiden and the introduction of motorised grinding equipment, the mills found themselves in an increasingly vulnerable position at the end of the 19th century when many were dismantled. De Valk, however, continued to produce flour until well into the 20th century, although this was not powered by wind during the final years.
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