Is Congress on Verge of Extending Renewable Energy Tax Breaks? Our Washington Insider Says Watch Oil Prices
Submitted by EnergyTechStocks.com
With the head of the American Wind Energy Association warning that Congress’s repeated failure to extend tax breaks for renewable energy production places at risk more than $11.5 billion in investment, green investors need to know whether last week’s flurry of action in Washington means that the Congressional logjam is about to be broken.
In case you missed it, last week the head of the U.S. Senate’s Finance Committee, Democrat Max Baucus, said he is tweaking the bill that includes an eight-year extension of tax breaks for wind, solar, etc. and that he is hopeful the Senate will act on it before its August 10 recess. Meanwhile, House Republicans introduced legislation that would earmark a portion of the royalties from new offshore oil and gas production to renewable energy.
EnergyTechStocks.com turned to its “Washington Insider” - someone deep in the politics of energy - and asked him: What does this mean for investors? Is the cloud of uncertainty hanging over the world’s biggest renewable energy market about to disappear?
His answer, which only would make sense in Washington, was that if oil prices keep going down, the odds are three to one against action, but that if oil prices suddenly surge to over $140 a barrel, there’s a 50-50 chance the Senate will approve the eight-year extension before the recess.
Reminded that oil prices have nothing to do with solar and wind power, our man said Washington only responds to crises and that it can only handle one crisis at a time. He said oil prices are the crisis du jour.
The Congressional stalemate is due to opposition by business groups, including the U.S. Chamber of Commerce, who complain that the bill extends tax credits for renewable energy production while eliminating tax breaks for some other business categories.
To be sure, even if Congress fails to act by August 10, it could still extend the tax breaks for renewable energy before they expire at the end of the year. Our Washington Insider said passage is more likely after the recess than before; however, after the recess Congress is more likely to give only a one-year extension, which would continue to leave the future of renewable energy in the U.S. up in the air.
