During Tuesday's State of the Union address, President Barack Obama urged Congress to pass clean energy legislation – such as an extension of the expiring production tax credit (PTC), which is crucial to ensuring the wind industry's short-term viability, as well as a clean energy standard.
In a largely populist, 65-minute speech marked by commitments to bolster the middle-class and domestic manufacturing, Obama laid out a blueprint for what he called ‘an economy that's built to last’ based on four main themes: American manufacturing, American energy, skills for American workers and ‘a renewal of American values.’
Obama called for a rollback of tax cuts on oil companies in favor of investments in clean energy sources. He urged Congress to not allow clean energy tax credits, such as the PTC, to lapse, which would place the U.S. wind industry even further behind China, the world leader in installed wind capacity.
‘I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here,’ Obama said. ‘We have subsidized oil companies for a century. That's long enough. It's time to end the taxpayer giveaways to an industry that's rarely been more profitable, and double-down on a clean energy industry that's never been more promising. Pass clean energy tax credits and create these jobs.’
The president reasoned that the same government support and investment given to oil and natural-gas exploration should be used to further develop clean energy.
‘And by the way, it was public research dollars, over the course of 30 years, that helped develop the technologies to extract all this natural-gas out of shale rock.’
‘What's true for natural gas is true for clean energy,’ Obama remarked. ‘Because of federal investments, renewable energy use has nearly doubled. And thousands of Americans have jobs because of it.’
Obama cited Holland, Mich.-based Energetx Composites' Brian Ritterby, who was in attendance as a guest of First Lady Michelle Obama, to underscore how wind energy supply-chain companies, such as Energetx, are adding jobs.
‘When Bryan Ritterby was laid off from his job making furniture, he said he worried that at 55, no one would give him a second chance,’ Obama explained. ‘But he found work at Energetx, a wind turbine manufacturer in Michigan. Before the recession, the factory only made luxury yachts. Today, it's hiring workers like Bryan, who said, "I'm proud to be working in the industry of the future.’
And in a thinly veiled reference to bankrupt solar manufacturer Solyndra, the president called for the continuation of investment for new technologies. ‘Our experience with shale gas shows us that the payoffs on these public investments don't always come right away,’ he said. ‘Some technologies don't pan out; some companies fail.’
Obama characterized the political divisions in Congress as ‘too great’ to tackle the broader issue of climate change, but he urged the legislative branch to – at a minimum – pass a clean energy standard.
‘The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change,’ he said. But there's no reason why Congress shouldn't at least set a clean energy standard that creates a market for innovation.’
Obama also used part of the speech to announce a federal incentive to build ‘clean energy projects’ on enough public land to power 3 million homes. He also said that the Department of Defense would make a large commitments to clean energy ‘with the Navy purchasing enough capacity to power a quarter of a million homes a year.’
The president's strong rhetoric, however, was not reserved solely for energy. He also had sharp words for unfair trade practices by China, which is particularly timely given that four U.S. wind tower manufacturers recently filed trade complaints against China and Vietnam with the U.S. Department of Commerce and the International Trade Commission.
‘I will not stand by when our competitors don't play by the rules,’ Obama said. ‘We've brought trade cases against China at nearly twice the rate as the last administration. Over a thousand Americans are working today because we stopped a surge in Chinese tires.
"But we need to do more," he continued. "It's not right when another country lets our movies, music and software be pirated. It's not fair when foreign manufacturers have a leg up on ours only because they're heavily subsidized.’
The president said that the creation of a newly formed trade-enforcement unit will be charged with investigating unfair trade practices in countries like China. There will also be more inspections to prevent counterfeit or unsafe goods from crossing U.S. borders, Obama said.
The industry's early reactions to the president's speech were enthusiastic.
‘The president gave a strong, full-throated endorsement of clean energy jobs and the opportunity they offer to create new jobs and economic hope,’ said Frank Maisano, an energy analyst at Washington, D.C.-based Bracewell Giuliani.
Maisano noted that the president's call to renew the PTC is positive signal to keep job growth moving forward.
‘His call will be helpful in making this effort a priority as Congress approaches must-pass legislation to fund government at the end of February," Maisano said.
The reality, however, is that Obama must work with a divided Congress to put his words into an actionable plan.
‘Speaking strong words about energy independence, clean energy and expanding oil and gas development is a strong first step,’ Maisano added. ‘Now, the president and Congress must work together to follow through.’
Shortly after the speech, the White House released some specifics on the president's domestic manufacturing initiative, which includes a temporary extension of the Advanced Energy Manufacturing Tax Credit as part of a broader manufacturing tax-reform proposal. This $5 billion investment would drive nearly $20 billion in domestic clean energy manufacturing, the White House said.
The tax credit was previously oversubscribed more than three times over. For more details on Obama's push to incent domestic manufacturers, click here.