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How House Republicans May Control the Energy Debate

With midterm elections complete and a GOP House in place, the newcomers have the opportunity to either push forward or detain renewable energy policy.

The new Congress has several ideas to work with that were held over from Obama's first two years in office, including a renewable electricity standard that expands the definition of what energy types count toward the thresholds, particularly adding emission-free nuclear power and clean coal to the definition of renewable energy. Some wonder if the new Republican Congress will be staunch policy conservatives like many of their predecessors, or flexible enough to implement changes that will positively affect renewable energy.

Tax incentives are sure to be a major driver to renewable energy development during this half-term. Rep. Dave Camp (R-MI) is in line to become the new chairman of the House Ways and Means Committee, a role that has significant influence over tax measures for renewables.

Camp is the current top Republican on the Ways and Means Committee. His Michigan District 4 is home to a number of wind and solar manufacturers, such as Dow Chemical, Dow Corning and United Solar Ovonic. Though a self-proclaimed supporter of alternative energy, Camp believes “it takes today’s energy to power tomorrow’s technology,” as he said in the April 14, 2010 Hearing on Energy Tax Incentives Driving the Green Job Economy.

“You cannot increase the cost of producing 85 percent of the energy being used today and expect consumers or employers to benefit from tax incentives that are going to less than 10 percent of the energy being used today,” Camp said.

Camp was referencing the fact that there was little change in America’s reliance on fossil fuels from 2007 to 2009 despite the investment of nearly $40 billion in tax subsidies for renewables enacted in October of 2008. In the remarks Camp made during the April 14 hearing, he said that in 2007, petroleum, coal, nuclear and natural gas supplied 93 percent of America’s energy, while renewable energy supplied only 7 percent. In 2009, 92 percent of the nation’s energy came from petroleum, coal, nuclear and natural gas and 8 percent from renewables.

While Camp’s words may seem discouraging to some renewable developers, his track record displays more openness toward renewables than some of his Republican predecessors. In October 2009, he cosponsored legislation to invest $2.25 billion for a solar technology research and development program and to create a committee to study the near and long-term research and development needs in solar technology. In November of 2009, he cosponsored legislation to amend the Internal Revenue Code of 1986 to allow an investment credit for property used to fabricate solar energy property. And as a push for the bulk of the power industry, Camp cosponsored legislation in January 2009 to amend the Clean Air Act to provide that greenhouse gases are not subject to the Act.

Elias Hinckley, a partner at the law firm Venable and professor of international energy policy at the Edmund A. Walsh School of Foreign Service at Georgetown University, said Camp’s reputation as a proponent of clean energy could be beneficial to renewables. However, if Tea Party candidates instigate an energy tax, “that may guide some of his policy driving.”

In regards to policy under the new House, Hinckley said the extension of existing tax subsidies for renewables is “relatively safe.” However, the Treasury Grant Program may not be met with an extension. “I see some real difficulty considering its eroding support,” Hinckley said.

Bob Cleaves, president and CEO of the Biomass Power Association, said Camp has been a supporter of biomass in the past and comes from a state that ranks in the top five states in the country in terms of biomass plants. “If the past is any judge of it, we anticipate continuing to getting a lot of support from within the Ways and Means Committee.”

Cleaves said extension of the Treasury Grant Program and other subsidies will depend largely on what happens during the lame-duck session. “The question is: is there going to be enough time in a lame duck for Congress to address the extensions? We’re very hopeful that it gets addressed before year-end.”

Instead of the new House focusing on climate issues, Cleaves said he expects a greater emphasis on tax policy. “Whether a newly reconstituted Congress can get their arms around the idea of a federal Renewable Portfolio Standard, I think that remains to be seen.”

Many political analysts are projecting the new House to offer suggestions for compromise, including tax breaks and incentives for investment in nuclear power, clean coal and renewable energy. Scott Segal, an industry lobbyist, told Politico that he expects Republicans to accept incentives for energy efficiency, nuclear power and hydroelectric power, coupled with credits for geothermal heat pumps and next-generation heating, ventilating and air conditioning.

“An approach like this would be very consistent with the expressed desire of the President to continue to focus on energy but to do so in ‘chunks’ as opposed to a comprehensive bill,” Segal said.

Camp’s philosophy seems to mesh with this expectation for new technology that will lessen reliance on foreign oil and encourage innovation through alternative and renewable fuels. In an issue statement, Camp said, “It is imperative that policies are in place to encourage the research and development of new, cellulosic fuels that use crop and animal waste and greater use of solar, wind, clean coal and other new energy technologies.”

 

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