Op-Ed: Randy Krehbiel: Did Scott Pruitt just declare war on renewables?

Source: By Randy Krehbiel, Tulsa World • Posted: Friday, October 13, 2017

Environmental Protection Agency Administrator Scott Pruitt may have declared an end to the “war on coal” earlier this week, but what some consider Pruitt’s own war on alternative energy seems to be just getting started.

Largely unnoticed amid the noise surrounding Pruitt’s expected move to excise the Obama administration’s Clean Power Plan from EPA regulations was his suggestion that he’d like to take down wind and solar power a notch or two.

According to The Hill, Pruitt told the Kentucky Farm Bureau: “I would do away with these incentives that we give to wind and solar. I’d let them stand on their own and compete against coal and natural gas and other sources, and let utilities make real-time market decisions on those types of things as opposed to being propped up by tax incentives and other types of credits that occur, both in the federal level and state level.”

Previously, Pruitt has let it be known he is not a fan of the federal Renewable Fuel Standard that helps make the ethanol business more profitable.

Pruitt, of course, is not alone in his opposition to these subsidies. Many view them as corporate welfare for enterprises that otherwise would not exist at all, or exist on a much smaller scale. Oklahoma has taken a machete to its renewable energy subsidies, and some seem determined to drive wind power from the state altogether.

The truth is, subsidies come in all sorts of sizes, shapes and aliases. They can be straight out tax credits, beneficial government-funded activities such as research, or trade policies that favor one form of the same basic product over another.

And, the fossil fuel sector benefits from them, too.

Who benefits the most, fossil or alternative, is a matter of great dispute, largely because of the difficulty in defining subsidies.

One recent study says subsidies allow wind power to understate its true generation costs by about one-third. Another says half of U.S. fossil fuel production would be unprofitable without subsidies.

Pruitt’s role in all of this is unclear. He likes to say government should not be “picking winners and losers,” and his mantra since his days suing the EPA as Oklahoma’s attorney general is that the agency should only enforce the law, not make it. Pruitt reiterated that earlier this week when he said it would be up to Congress to repeal alternative energy subsidies.

Ethanol proponents see a different objective. In an op-ed last week, the chairman of the Renewable Fuels Association suggested Pruitt is trying to manipulate the compliance credits associated with ethanol to benefit oil producers who trade in them.

This is all very deep stuff that few people outside of the industry understands or is even aware of — which underscores how much is at stake.

What we do know is that Pruitt has declared victory in the war on coal. Now we’ll see if he leads one on renewables.