Obama win may still leave PTC survival in doubt

UNITED STATES: Congress seats are also up for grabs on election night and Republicans, who will make life difficult for Obama, are expected to win there.

The same day US President Barack Obama made a campaign stop in Iowa to push for an extension of the production tax credit (PTC), Republican hopeful Mitt Romney appeared at a coal mine in Ohio to talk about his plan for energy independence through a strategy largely focused on fossil fuels.

It was a vivid illustration of the political split on energy issues that has emerged during this US election campaign, and on wind energy in particular. Support for renewing the $0.022/kWh PTC, which is set to expire at the end of this year, has become a regular feature of Obama's speeches.

His recent address to the Democratic National Convention promised "a better path" forward, with calls for an end to oil-industry subsidies and the implementation of energy initiatives that, although they do not exclude continued fossil fuel development, are heavily tinged with green.

Romney, by contrast, has hit hard against his opponent's support for renewable energy. In an earlier comment piece in the conservative-leaning Columbus Dispatch, he accused Obama of trying to replace "real energy" with "an imaginary world where government-subsidised wind mills and solar panels could power the economy".

Romney on renewables

Romney and his vice-presidential running mate, Paul Ryan, have argued that the PTC should be left to lapse. And while Romney includes renewables in the list of energy resources that North America needs to take "full advantage" of, he thinks the federal government should focus efforts on funding research and relaxing regulatory barriers.

"The same policies that will open access to land for oil, gas and coal development can also open access for the construction of wind, solar, and hydropower facilities. Strengthening and streamlining regulations and permitting processes will benefit the development of both traditional and alternative energy sources," Romney's energy plan states.

But an Obama win will not necessarily set the sector on a path to long-term policy stability, nor will the election of Romney necessarily mark an end of federal support for wind.

Seats up for grabs

All 435 seats in the House of Representatives, the lower chamber of the US Congress, and 33 out of the 100 seats in the Senate, the upper house, are also up for grabs in the 6 November poll. The results will have a significant impact on what the next president is able to accomplish.

"Whether it is Obama or Romney, there is still Congress to contend with," said Christine Tezak, research director at consulting firm Clearview Energy Partners.

Only Congress can pass legislation and, at this point, political partisanship has ramped up to a point where very little gets to the president's desk to be signed into law.

That will likely continue to be the case, said Keith Martin, a partner at law firm Chadbourne & Parke. "The only possible outcome from the election that could change the dynamic is one that is not very pleasing to the renewable energy industry - and that is if the Republicans sweep the White House and the Senate and retain the House. Then they will be in control," he said. "Anything else is likely to be a source of further gridlock because the Democrats are unlikely to take control of the House away from the Republicans."

Still, said Martin, the odds of a PTC extension are greatest if Obama wins and the Democrats retain control of the Senate. Obama is unlikely, however, to make much headway in his goal of implementing a clean energy standard that would see 80% of US electricity come from wind, solar, nuclear, natural gas and clean coal by 2035. "It is just too controversial at this stage," said Martin.

A Romney win would not end the chances of a PTC extension. In fact, said Tezak, it could improve the likelihood of it happening before he takes office in January. There is Republican support for the credit in the current Congress - not surprisingly, given the fact that, according to the American Wind Energy Association, 81% of US wind farms are in Republican-held electoral districts.

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