Energy Policy Modernization Bill

Floor Speech

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Mr. LANKFORD. Mr. President, I have two different amendments that are coming to the floor. One deals with the Energy bill. One of them deals with the Land and Water Conservation Fund. This bill does a permanent extension of the Land and Water Conservation Fund. My question on that has been this: The money that is being allocated for the Land and Water Conservation Fund to be able to purchase properties--are we also allocating money to be able to actually maintain those properties?

Currently, in the current existence of this bill, there is some money allocated to it in some future way, but I have a simple request: As much money as we allocate to dealing with purchasing new properties, we should also focus in on maintaining what we already have because we have billions of dollars in maintenance backlog. Right now one of the worst conservation things that can happen in many parts of the country to land is actually put it into Federal trusts because it is not being taken care of once it actually goes into the Federal trust.

But that is not the prime issue I want to talk about right now. Oklahoma is truly an ``all of the above'' energy State. Oil, gas, coal, wind, geothermal, hydroelectric, solar--we actually use all of those platforms in a very diverse energy economy. A tremendous amount of wind energy is produced in Oklahoma, used in Oklahoma, and exported to other States around us. It is a very important energy source for us. It has been incredibly beneficial, and it is an important part of our portfolio of a diverse energy platform.

We have a challenge to deal with our tax policy. Just a few weeks ago, this Congress--the House and the Senate--passed a change in the way the wind production tax credit will be handled. As a quick review for this body, the wind production tax credit was put in place in 1992. It was a short-term tax credit to give a little bit of help to a brandnew wind energy and several other diverse energy portfolios, but it was especially targeted at wind to help a brandnew energy source get started.

Twenty-four years later, this temporary tax credit is still sitting there. As of a few weeks ago, it was changed. It was changed so that in 2015 and 2016 the full tax credit will still be there, but starting in 2017 that tax credit will drop to 80 percent of what it is now, in 2018 it will drop to 60 percent, in 2019 it will drop to 40 percent, and in 2020 it is left undefined.

I heard multiple individuals say this is a phaseout of the production tax credit--a phaseout. That is something many of us have pursued for many years--how do we get out of this perpetual cycle? The problem is it wasn't a phaseout, it was a phasedown of the production tax credit because in 2020 the PTC is left undefined. Most people would say that is not a problem. It will just go away. It is left undefined. The problem is 10 times in the past 24 years the production tax credit has been undefined for a future year assuming it would go to zero, and 10 times this Congress has gone back and retroactively put it back into place--10 times. So to say in 2020 we are going to leave it undefined and it will go away is not a true phaseout. That is a phasedown, and it leaves it in the Tax Code.

My amendment is simple. A few weeks ago this body agreed that we would phase out the production tax credit. The best way to do that is to remove that part from the Tax Code in year 2020 and then it would be eliminated and would actually go away.

Why would I encourage that? I would encourage that for several reasons. It provides certainty in the industry. Several individuals I talked to in the industry say they need certainty in their planning. This would help with certainty in planning. It is assumed right now that it goes away in 2020. I would like to make sure everyone understands it really does go away in 2020. It is eliminated from the Tax Code. This is keeping everyone honest based on what they said they wanted to do, and we actually eliminate that production tax credit that year. It provides that great certainty that industry needs to know for their own planning, for their investment, and for outside capital resources and how that money comes in. It is also because these extensions are extremely costly.

The extension that was just done in December by this Congress will cost $17 billion over the window--$17 billion. May I remind everyone that we just had an extended argument over how we were going to fund the Transportation bill last year when we needed to find $13 billion a year to fund transportation, and we just did a production tax credit for wind that is $17 billion.

If we are going to deal with a lot of our national priorities, I am great with having wind in our portfolio, but this is not a new industry that continues to need support and provide the clarity that is needed to make sure we actually end this tax credit when we said we were going to end this tax credit. Let's remove it from the Tax Code in 2020 and make sure it goes away, and the only way it can be renewed at that point is to go through the normal tax process, create a new tax, and actually do it in the full sunlight rather than just say: Well, we are going to do another tiny extension again.

Wind has increased generation dramatically over the past 24 years, and I am glad. It is a good source. In our Nation, since 1992, wind generation has increased 3,000 percent. It is well developed, it is economically stable, it is pulling its own weight in the system, and we should allow it to continue to fly on its own. It is not as if wind goes away if we don't provide a tax credit.

It is interesting to note that in 2014 we faced something very similar to this. In 2014 it was one of those years that the tax credit was to go away and not exist anymore. It had expired. The problem was that at the very end of 2014, Congress did a retroactive renewal of the production tax credit for the year 2014 in the last days of December. So the whole year had gone by without the tax credit, and during the very last days of 2014 Congress once again renewed the production tax credit and did it retroactively. That year, 2014, the wind association noted that there was $12 billion of private investment into wind that year. The tax credit was only applied in the final days.

Wind is a good energy source, but it does not need additional Federal dollars to be able to compete in this market. We have made that decision. Now it is time that we actually both trust and verify and that we reach out to this last year, when we said as a body that wind energy would not get a production tax credit anymore, and remove it from the tax credit and verify for ourselves that, no, it is not going to happen.

One last thing. I came into this body 5 years ago and served in the House of Representatives. For the 4 years I served in the House of Representatives, I distinctly remember the first year, in 2011, when I sat down with some folks from wind energy and I asked: How much more time do you need for the production tax credit because wind continues to increase its efficiency. They said: It is becoming much more efficient. If we had 3 more years, we could make it. Again, this was in 2011. The discussion was that by doing a phasedown in 2011 they would need just 3 more years and it would go away.

In 2014 I was in a hearing in the House of Representatives, and I asked those same individuals: How much more time do you need for a phasedown and phaseout of the production tax credit? The same person said to me: If I just had 4 more years, we could phase this out. I am concerned, and I believe rightfully so, that in 2019 this body will have lobbyists come into it and say: If we just have a few more years of the PTC extension, we could make it just fine. I would argue they are doing very well as an industry--and I am glad they are. Let's make it clear the PTC ends in 2020 and does not return.

With that, I yield back my time.

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