Legislation to extend some $18 billion worth of tax credits for renewable energy fizzled in the Senate Wednesday, as Republican lawmakers made good on their stated intent to prevent the bill from moving forward unless it were accompanied by support for domestic oil drilling.
The Jobs, Energy, Families, and Disaster Relief Act of 2008 extends solar-energy investment tax credits for eight years, and extends credits for gasoline alternatives and wind power for one year. To move forward, the bill would have required a filibuster-proof 60 votes, but it received only 51, with 43 opposed.
Major business groups, usual GOP allies, have implored Congress to act on the tax credits, many which expired at the end of last year or will run out at the end of this year. But for many Republicans, it's a matter or principle and politics: many oppose what they say are new tax increases to pay for parts of the package and nearly all say the Senate's only business now is acting on an energy bill that promotes drilling and other measures to boost domestic oil supply.
The White House, citing new taxes and other objections to the bill, threatened a presidential veto.
Although the tax legislation stalled on Wednesday, it is not dead. The bill can be brought to a vote again, and [Sen. Harry] Reid said he is open to negotiating with Republicans to get the bill passed.
Republican leaders expressed support for the tax package, but said they wanted to focus on passing legislation that would increase domestic oil production.
Separately, lawmakers remain locked in a stalemate over the passage of a bill aimed at reining excessive speculation.
Early on Wednesday, an aide said Senate Republican Leader Mitch McConnell had accepted an offer from Reid to move forward on the speculation legislation, but a spokesperson for Reid rebuffed these claims saying the Republican "overtures about a 'deal' are disingenuous at best."
Reid said on Tuesday that if Republicans blocked the tax package, he would cut off negotiations over speculation bill.
Keith Johnson, an environmental blogger for the Wall Street Journal, points out that, while renewable-energy credits have not been allowed to lapse since they were first introduced, the year-by-year renewal process tends to put people on edge:
The U.S. has never had long-term clean-energy subsidies in place; usually they are renewed for a year or two at a time. Lots of people in the industry blame that unpredictability for the stop-and-start pattern the clean-energy industry’s developed over the last two decades. New projects generally come to a standstill the year after tax credits expire. The American Wind Energy Association, a trade group, lambasted the Senate and pointed to “116,000 jobs and nearly $19 billion in investment at risk.”
But despite the dicey investment environment, some renewable types of energy are thriving. The Guardian reports that the American Wind Energy Association is expected to announce next month that America has become the world's leading wind producer. And a story by science writer John Louima in Yale's eco-mag, Environment 360, reports that investors have become very bullish on solar photovoltaic technology.