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Is the Green Energy Bubble Finally Bursting?

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Is the Green Energy Bubble Finally Bursting?

January 28, 2014

What was notable about the last night’s State of the Union address with regard to energy was not what the president said, it was what he did not say. 

We heard the usual tired bromides. It only took four paragraphs before the inevitable mention of the evils of “foreign oil.” It was only a bit longer before President Obama uttered the execrable phrase that has been a prerequisite for every US president since Richard Nixon: “energy independence.” 

But several key energy words were missing in action. There was not a single mention of biofuels. Not a word about wind energy. And nothing about electric vehicles. 

Recall that it was during his State of the Union address in 2011 that Obama claimed that “We can break our dependence on oil with biofuels.” In that same speech he said the US could, “become the first country to have 1 million electric vehicles on the road by 2015.” But in last night’s speech, after years of support for the corn ethanol scam, biofuels got nothing. And electric cars got no love at all. None. 

And while biofuels and electric cars went missing, The Biggest Loser in last night’s address was the wind industry. 

That can be verified by looking back at the last three State of the Unions. In his 2011 speech, Obama touted wind energy. He did so again in 2012, and even introduced a Michigan man, Bryan Ritterby, who had been laid off from his job making furniture, but had recently found work making wind turbines. “Before the recession, the factory only made luxury yachts,” said Obama. “Today, it’s hiring workers like Bryan, who said, ‘I’m proud to be working in the industry of the future.’” Obama went on to declare “I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here.” 

In 2013, Obama said the US had doubled “the amount of renewable energy we generate from sources like wind and solar—with tens of thousands of good American jobs to show for it.” He went on, saying “Last year, wind energy added nearly half of all new power capacity in America. So let’s generate even more. Solar energy gets cheaper by the year—let’s drive down costs even further. As long as countries like China keep going all in on clean energy, so must we.” 

But last night, nothing about wind. What happened? 

In a word, prosecution. In November, after years of a pernicious double standard under which the wind industry had a de facto exemption from prosecution under the Migratory Bird Treaty Act and Eagle Protection Act, the Justice Department finally—finally—brought charges against the operators of a wind project that had been killing birds. A subsidiary of Duke Energy agreed to pay $1 million for killing golden eagles and other federally protected birds at two of the company’s wind projects in Wyoming. 

The guilty plea was a long-overdue victory for the rule of law. The prosecution also put the Obama administration into an untenable position: how could it advocate for continued subsidies for wind—in the form of the production tax credit—and at the same time be prosecuting that same industry for violating some of America’s oldest wildlife laws? The prosecution undoubtedly played a role in Congress’s decision not to extend the production tax credit which expired at the end of last year. And during his speech, Obama was completely silent on the need to keep up with China or Germany on wind energy.

To be sure, Obama’s speech did acknowledge the soaring production and use of natural gas in the United States and the positive economic and environmental benefits that are coming with it. But he also made it clear that he is going to continue his assault on the coal industry, even though he did not mention coal. Instead, he said his administration would set limits on the “amount of carbon pollution our power plants are allowed to pump into the air.” That was a reference to the EPA’s pending rules on carbon dioxide emissions which effectively require coal-fired power plants to use carbon capture and sequestration, a technology that has never been deployed on a commercial scale.

So yes, we heard about the usual suspects last night. But Obama’s omission of the wind sector provides yet another clue that the “green” energy bubble may finally be bursting.

Robert Bryce is a senior fellow at the Manhattan Institute for Policy Research. You can follow him on Twitter here.

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