- The Washington Times - Tuesday, April 22, 2008

ANALYSIS/OPINION:

Earth Day 2008 is an opportunity to celebrate the progress we’ve made toward building a cleaner future for our world — more importantly, it is a time to rededicate ourselves to facing and solving the problems that continue to threaten the long-term health of our environment. None of those challenges is more critical than the need to find new and “greener” ways to help meet global energy demands.

The world’s thirst for energy continues unabated. According to the U.S. Energy Information Administration, global demand for all forms of energy is expected to grow by 54 percent between now and the year 2025.

At the same time, pressure to reduce greenhouse gas emissions is increasing worldwide. To secure its energy future while also meeting its environmental responsibilities, it is essential for our country to explore and develop all of its available energy options including nuclear, natural gas and cleaner ways to use our most abundant fuel source, coal.

While such traditional fuels remain vital to the energy and economic health of our country, it is equally clear that renewable energy must be an integral part of the 21st century energy mix. This sector holds great promise, not only for cleaner sources of energy, but also for the creation of thousands of needed U.S. “green collar” jobs.

Currently, the most commercially viable renewable energy technology is wind. A supportive policy environment has enabled the U.S. to become the global leader in new wind power installations. In 2007, the country added 5,244 megawatts of wind power, more than 25 percent of the world total and a 45 percent increase in U.S. installed capacity over the previous year, a new record. And the U.S. is on pace to surpass Germany as the global leader in installed wind power capacity in 2009.

According to the American Wind Energy Association (AWEA), last year the industry spurred $9 billion in investment and created more than 50,000 jobs. In the U.S. wind power displaces 3 percent of natural gas consumption and avoids the emissions of 28 million tons of carbon dioxide from traditional power plants — equal to taking six million cars off the road.

Despite this impressive progress, we are far from reaching the full potential of our wind resources. Today, less than 1 percent of our nation’s energy is generated by wind; the AWEA has estimated we have the potential to drive that number as high as 20 percent.

Furthermore, the continued growth of the U.S. wind industry could be threatened by policy uncertainty.

A clear illustration of the importance of stable, long-term policy is the historical “boom-bust” pattern of the U.S. wind segment resulting from the on-again, off-again nature of the federal production tax credit. When the production tax credit expired at the end of 1999, 2001 and 2003, wind power installations declined by 73 percent-93 percent. By contrast, the repeated extensions in 2005 and 2006 have stabilized the policy environment, establishing the U.S. as the world leader in annual wind power installations and stimulating investment and jobs.

The current production tax credit is due to expire at the end of this year. Allowing that to occur would have a devastating impact on the U.S. domestic wind industry. A recent report compiled by Navigant Consulting for the American Wind Energy Association estimates that failure to extend the tax credit would cause a 90% drop in wind power installations and the loss of 76,000 job opportunities in 17 states in 2009 alone.

At a time when our country is seeking to stimulate its economy, investment and jobs that might have been created here could instead shift overseas to Europe and China, which are strengthening their wind policies. Failure to extend the wind tax incentive could seriously undermine the U.S. wind industry’s ability to successfully compete with foreign companies that are receiving subsidies from their governments.

The strong connection between a stable domestic policy and a vibrant export sector for renewables is exemplified by Germany, whose incentive system has created the world’s leading installed base in a country with a moderate wind resource. Wind power technology is Germany’s second leading export industry after automobiles - a fact that U.S. policy-makers might consider as they explore options for increased job growth in depressed manufacturing regions.

Our country is well positioned to benefit from the growth of the wind energy industry. However, continued growth of this industry depends heavily on a stable, predictable policy environment. Without it, we will squander our leadership role in one of the most promising sectors for stimulating jobs, investment and exports.

John Krenicki is president and CEO of GE Energy.

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