The government in Wyoming state have proposed a controversial “air tax” which would levy a tax on wind, angering wind farm owners who say the tax will put them out of business.
The proposal is seen by many wind farm businesses as an attempt to protect the lucrative fossil fuel industry.
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In fact, for the past three years Wyoming has already been taxing the energy generated by wind turbines at a rate of $1 per megawatt-hour produced.
Although this tax has so far generated only $15 million for the state, it has placed a significant burden on the wind power industry; no new wind farm projects have been undertaken since the tax went into effect in 2012.
Wyoming legislature considering even higher taxes that could kill the state’s wind power industry
And now the state is considering raising the tax rate to as much as $12 per megawatt-hour – a move that could effectively put Wyoming wind farms completely out of business.
Wyoming is the only state that levies taxes on wind, and the motivation appears to be a an effort to retaliate against federal government policies aimed at scaling back coal mining operations – an industry Wyoming has traditionally depended on for jobs and tax revenues.
The potential of Wyoming’s wind industry is huge; the state could eventually supply half of the nation’s wind power, according to some studies, and that fact is part of the ammunition that proponents of higher taxes on wind power are using to support their argument.
There is some merit to their argument – wind power is unlikely to create many new jobs in the state compared to what the coal industry once provided, and there are other factors worthy of consideration as well.
From the Los Angeles Times:
“[Supporters of the wind tax increase] also say Wyoming doesn’t necessarily need clean energy, much less the turbines that harness it. Giant towers would line the horizon for decades to come, altering the state’s wide-open spaces more fundamentally than drilling rigs or even vast surface coal mines.”
Proponents of the tax increase also argue that the wind power generated in Wyoming will disproportionately benefit states who buy the energy, and that the “social cost” of the industry to Wyoming residents justifies the proposed tax hikes.
It is true that California is the primary market for the energy produced by Wyoming wind farms, but those in the wind energy industry maintain that once the transmission infrastructure is in place and operations go into full swing, the state will reap nearly $1 billion over the next two decades under the current tax structure.
And uncertainty over future tax rates may kill the proposed transmission line project which would deliver the power to California – a project that would also create new jobs in Wyoming.
There are many considerations to be addressed on both sides. Renewable energy is not the panacea that some have touted it to be; there are costs associated with wind power. Wind turbines do mar the landscape, kill birds and pose a threat to wildlife habitats, and require the use of highly toxic substances in their manufacture.
Policies should reflect the needs of the public, not the fossil fuel industry
However, in the opinion of many objective experts, renewable energy sources such as wind and solar power are still much cleaner than fossil fuels, and represent the future of energy production.
At any rate, decisions made at the state level should not be made with the protection of the fossil fuel industry in mind. Policy should be drafted with the interests of the public and the environment placed first and foremost.
As Matt Agorist of The Free Thought Project noted:
“As the energy monopolies of the 1900’s attempt to prop up their soon-to-be obsolete industry, the smart and ethical ones will figure out ways to adapt. However, as is the case the majority of the time, those with access to the state will prop themselves up the only way they know how — with government.”
Unfortunately, from all indications, a rational approach isn’t likely to be implemented anytime soon.