Sen. Grassley defends extending tax credits for renewable energy

CEDAR RAPIDS - It's been a big week for renewable fuels, according to Sen. Chuck Grassley after the Senate Finance Committee voted 23-3 to approve extending tax credits for wind energy, biodiesel and cellulosic ethanol.

He called the wind energy production tax credit extension a 'particular victory (because) we regularly have to fight to make sure wind energy has a fair shot along with other energy tax incentives.”

'So far, those of us who understand the value of wind energy and other renewables are succeeding,” Grassley told Iowa reporters on a conference call Wednesday.

Grassley hopes the full Senate and House will go along with the tax credits, which are included in a package of 'extenders” that Congress regularly takes up on an annual basis.

As popular as the credits for wind and biofuels are with Grassley, he acknowledges that a 'legitimate ideological” argument can be made that it's another case of the federal government picking winners and losers.

For example, FACT (Financial Accountability and Corporate Transparency) Coalition is critical because the extensions are approved without revenue offsets. 'Many of the provisions,” the group said, 'are specialized corporate loopholes.”

On the other hand, the American Wind Energy Association (AWEA) welcomed committee' approval of the energy Production Tax Credit as a 'step in the right direction.” The tax credit has been 'instrumental in allowing the industry to lower costs by more than 50 percent in the last five years.”

Grassley conceded the extensions are a case 'where we are picking winners and losers.” However, he defended their use as an appropriate tools when they were created in the 1970s when President Jimmy Carter thought the nation would run out of natural gas and began promoting the use of coal.

'Now we say coal is bad and we've got plenty of natural gas,” the Iowa Republican said. When it looked like the nation was going to be importing all of its energy other than coal, 'we took every step we could.”

'We were going to do everything we could to make sure we were less dependent on foreign sources of energy,” Grassley said about tax incentives for ethanol, biofuels, wind and solar.

Now the incentives are under attack because the natural gas is plentiful and cheap, Grassley said.

'If we had known that we were going to have fracking and being able to export natural gas and petroleum, we wouldn't have spent all of this effort or had an opportunity to market ethanol and wind,” Grassley said.

He defends extending the incentives because 'we've invested all of this money, so let's get them to maturity and then cut it off.”

The AWEA agrees. In 2012, it told Congress it believed the credit could be phased out.

Grassley also joined 36 other senators to urge the EPA to increase the level of production volumes set under the Renewable Fuel Standard for biodiesel.

'The EPA is underestimating the potential for production of biodiesel,” he said. 'No federal policy should sell renewable energy short.”