Wind turbines stand at the mouth of Spanish Fork Canyon in Spanish Fork,… (George Frey/BLOOMBERG )
The wind power industry boasts enviable political assets in its fight to preserve a prized tax benefit. Republican and Democratic governors trumpet the benefits of wind energy; industry officials can identify manufacturing jobs at risk in crucial presidential election swing states if the tax credit expires; and a phalanx of lobbyists and consultants are working to ensure it stays in place for at least one more year.
But now an unusual coalition is fighting the extension, including tea party followers, GOP presidential nominee Mitt Romney and the electric utility most closely associated with President Obama.
The result is an unpredictable and intense lobbying fight.
“This is a pivotal moment for that industry,” said David G. Victor, an international relations professor at the University of California at San Diego and an energy expert.
The battle over the wind production tax credit — which can cut the cost of developing a wind project by nearly a third — centers on a single question: Is the wind industry mature enough to survive without the tax break it first received 20 years ago, or does it need a lifeline for a bit longer?
As the Dec. 31 expiration deadline looms, wind manufacturers and their suppliers are shedding jobs and scaling back operations. Siemens Wind Power, a major turbine manufacturer, announced Tuesday it was laying off more than 900 employees. Earlier this month, wind tower maker Katana Summit said it would shut down plants in Nebraska and Washington, putting nearly 300 out of work, while wind blades manufacturer Molded Fiber Glass announced it would pink-slip 92 of its 370 workers in Aberdeen, S.D.
“Companies have been investing on the basis that [the tax credit is] there,” said Joseph A. Stanislaw, an economist who runs the JAStanislaw Group. “It changes the game. Every time you pull it, or threaten to pull it, you throw the industry into disarray.”
Liz Salerno, chief economist for the American Wind Energy Association, said in an interview that while wind has made technological advances and is increasingly competitive with traditional sources of energy, the uncertainty surrounding federal policy has rattled the industry.
“It’s hard to make those new investments in bringing down costs when you don’t know what the world will look like a hundred days from now,” Salerno said.
The layoffs have been particularly potent because several swing states — including Iowa, Colorado and Ohio — have significant wind manufacturing. The industry accounts for more than 3,200 current or planned manufacturing jobs in Iowa and 3,000 in Colorado, according to AWEA. Ohio ranked as the fastest-growing state for new wind-power installations last year and has 50 manufacturing facilities.
Romney says he would end the programs Obama has pursued to support solar, wind and other renewable energy manufacturers, including the wind tax credit. He has backed a renewable fuels standard, however, and has not called for an end to the tax breaks for oil and gas firms.
“Governor Romney . . . agrees with the industry’s own assessment that a boom-and-bust cycle driven by short-term incentives is not conducive to business investment and increased employment,” Romney spokeswoman Andrea Saul said. “Instead, he believes the right path forward is to create a stable and level playing field for all energy sources that encourages and rewards innovation, on which the wind industry can compete and win wherever its technology is economically viable.”
A source familiar with Romney’s tax policy, who spoke on the condition of anoymity because the race is ongoing, said the nominee “views almost everything on the table through the lens of fiscal austerity.” The tax credit — which would cost $3.3 billion to extend for another year — fails to meet the Republican nominee’s budgetary test.
Now that Congress has ended ethanol subsidies, many are making the same argument regarding wind: The industry has gained maturity, and it will still get a boost from renewable portfolio standards in 29 states and the District of Columbia that require utilities to buy a certain percentage of electricity from renewable sources.
But Obama has seized on the issue in the campaign, telling an audience in Council Bluffs, Iowa, on Aug. 13 that “without these wind energy tax credits, a whole lot of these jobs would be at risk.”
Romney’s position also has caused friction with some other Republicans: 81 percent of wind power is generated in congressional districts represented by Republicans, according to AWEA. In an interview with Radio Iowa, the state’s governor, Terry Branstad, a Republican, called Romney’s aides a “bunch of East Coast people that need to get out here in the real world to find out what’s really going on.”