Despite coming under fire for controversial green energy loans during his first term, President Obama’s proposed 2014 budget would permanently extend tax credits for renewable energy production, energy efficiency, and advanced energy manufacturing.
“To provide a strong, consistent incentive to encourage investments in renewable energy technologies and to help meet our goal to double generation from wind, solar, and geothermal sources by 2020,” according to the White House, “the Budget would make permanent the tax credit for the production of renewable electricity.”
The budget dedicates $23 billion for incentives for renewable energy production and energy efficiency programs over the next decade. An additional $2.5 billion in tax credits would be given to companies that invest in advanced energy manufacturing projects, such as facilities for green energy manufacturing — bringing the total amount of clean manufacturing tax credits to $4.8 billion when combined with credits from the stimulus package.
The oil and gas industry would see their benefits cut in Obama’s proposed budget, as he wants to eliminate $4 billion in tax subsidies for oil and gas companies. However, the oil and gas industry has said that they don’t get subsidies, only “cost recovery benefits.”
“The oil and gas industry gets no subsidies, zero, nothing,” said Jack Gerard, president and CEO of the American Petroleum Institute. “We get cost-recovery benefits, much like other industries. You can go down the road of allowing economic activity, generating hundreds of billions to the government, or you can take the alternative route by trying to extract new revenue from industry by increasing their cost to do business.”
Earlier this year, Congress extended the tax credit for wind energy production. The Joint Committee on Taxation reported that a one-year extension of this tax subsidy alone would cost taxpayers $12.1 billion.
The Congressional Budget Office reported that tax benefits for renewable energy and energy efficiency make up three-quarters of energy-related tax subsidies the government is expected to give out in 2013. In total, the federal energy tax subsidies will cost more than $16 billion in 2013, and tax subsidies for fossil fuels only make up 20 percent of the total. Tax subsidies for nuclear power make up seven percent.
The CBO said that $7.3 billion — 45 percent — in energy tax subsidies will go toward renewable energy and another $4.8 billion — 29 percent — will go towards energy efficiency.
“The same week that the U.S. Comptroller General identified scores of fragmented, duplicative and wasteful renewable energy programs, the Obama budget calls for even more spending on these and other initiatives, including permanent taxpayer-funded subsidies for century-old industries like wind and solar,” said American Energy Alliance president Tom Pyle.
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