Global Project Finance > Tax Equity Telegraph > Senator Grassley Proposes Repeal of Fossil Fuel Tax Incentives if any Renewables Tax Incentives Expire
08 Aug '13

The tax press is reporting comments made by Senator Grassley (R-IA) at a Department of Energy forum on biomass.  Senator Grassley is reported to have said: “Congress should ‘do away with the incentives for oil’ tax breaks if tax breaks for alternative energy are repealed or allowed to expire.” The report goes on to provide: “Grassley … declined to specify which incentives he was referring to, simply saying ‘any of them.’”1

Senator Grassley has a long history of being a staunch supporter of renewables; the renewable energy industry likely appreciates the spunk reflected in his comments. However, given the almost century of support that Congress has provided the fossil fuel industry in comparison to the relatively recent significant support the nascent renewables industry has received, the suggested scenario is far from equitable.

The scenario posited in the senator’s comments is comparable to a parent having two children years apart in age. For the older child, the parent pays for college, graduate school, a wedding, provides a down payment on a house, gives them a car and helps them start a business. Once all of that is complete, the younger child is just finishing high school. Then the parent says I need to start saving for my retirement, so I am no longer providing either of you with financial support.  The financial support may have been terminated in the same year, but the younger child is in a far different position than the older child.

1 Natter, Ari.  Grassley Calls for Ending Oil Incentives if Alternative Energy Tax Breaks are Removed, 148 Daily Tax Report G-9 (Aug. 1, 2013).