Earlier this week, Democratic leaders in the House of Representatives proposed the Renewable Energy and Energy Conservation Tax Act of 2008 (HR 5351), which would extend the 30% investment tax credit (ITC) for solar energy property and the production tax credit (PTC) for qualifying renewable energy facilities.
While the legislation will not be officially introduced until the end of the month, opponents have begun to launch their attack on the legislation.
The legislation calls for the repeal of certain tax benefits enjoyed by oil and gas companies. Charles Drevna, president of the National Petrochemical and Refiners Association, told Reuters the proposed legislation should be blocked because it targets ‘the domestic oil and gas industry for punitive taxes that would discourage reinvestments in new technologies and facility efficiency upgrades, to say nothing of hurting its competitiveness with state-owned oil companies in unstable regions of the world.’
Former House Majority Leader Dick Armey, currently the chairman of political advocacy group FreedomWorks, derided the notion that renewable energy investment will lead to job growth and economic development.
‘HR 5351 is based on the failed belief that government can create jobs,’ says Armey. ‘The reality is that government taxes and regulation are much better at destroying jobs than creating them. HR 5351 will no doubt create energy production jobs overseas, but will destroy them at home. In a time when we want to encourage our economy, it makes no sense to raise energy prices, squeeze family budgets, and stifle our industry's ability to compete globally.’
Ben Lieberman, senior policy analyst in energy and the environment in the Thomas A. Roe Institute for Economic Policy Studies at the Heritage Foundation, echoed Armey's opposition to taxing the domestic oil and gas industry, but went further in questioning the viability of renewable energy technologies.
‘After all these years, Washington has failed to grasp the serious economic and technological shortcomings of these technologies, which is why they needed special treatment in the first place,’ he says.
‘Federal efforts to pick winners and losers among energy sources – and to lavish mandates and subsidies on the perceived winners – have a dismal track record relative to allowing market forces to decide the direction of energy innovation,’ Lieberman adds.