Energy Bill Passes with Bipartisan Support – 4/22/16

Congressional deadlock is considered par for the course nowadays, but occasionally a much needed piece of legislation will manage to dodge the riders and partisanship that usually kill off bills in the House and Senate. Fortunately, the Senate recently pass in 85-12 vote one such bill concerning energy that would create modest renewable energy initiatives and update oil and gas infrastructure; its success is attributed to a lack of items usually causing partisan conflicts. A similar bill was passed in the House, but included measures that led the White House to threaten a veto forcing more debate. A compromise between the two energy bills is now in the works.

Though not as dramatic as the end of the oil-export ban or the extension of tax credits for wind and solar power projects, measures in the bill are expected to have a significant effect on energy in America. Items on the bill include: a review of mandates to incorporate biofuels into gasoline, infrastructural improvements in response to the oil and natural gas boom, policies on the incorporation of rising electricity from renewable energy, and many others related to energy efficiency and the power grid.

The chances of a bill reaching Obama’s desk while remaining palatable enough to avoid a veto have been boosted by increasing support for renewable energy among Republicans since falling costs and a rising number of jobs are giving impetus to the shift to clean power which was long derided as expensive and job destroying. Climate change believers or no, the cost of wind and solar power is plummeting. And from the drop in prices, market forces are creating some counter-intuitive situations where red states, like Texas, are leading in new projects simply because access to high wind speeds and sunlight make them tantalizingly profitable.

by state

According to Bloomberg, the average long-term contract price for wind power paid by utilities has dropped 60% since 2009. Including subsidies, the prices are on par with off-peak power prices in some regions, BNEF analyst Nathan Serota said. The solar price drop has been even steeper, falling 65% with contracts as low as $37 per megawatt hour, Serota said.

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So while Donald Trump, Ted Cruz, and most GOP party leaders reject the fact that humans have played a role in climate change, many Republicans are ready to consider renewables an investment with great tangible returns. They grow less inclined to toe the party line on clean energy as they realize the benefits of cheap electricity, increased energy independence, and economic development, especially in impoverished rural areas, outweigh the costs of breaking with an outdated expectation of opposition.

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Republican districts as seen above are benefiting greatly from wind and solar companies. Such companies employ nearly 300,000 people in the U.S. in 2015, or roughly 400% more than the number employed by the coal industry, according to the American Wind Energy Association, so dissent from elected officials whose constituents benefit much more from wind than coal is understandable. For instance, though Republican Senate Majority Leader Mitch McConnell has rallied his party against the “war on coal” affecting Kentucky’s coal industry, Republicans from states in the Plains region where wind power is cheap and coal production is minimal might easily resent being railroaded into an anti-renewable position.

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