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Energy Update, January 27, 2012

January 27, 2012

State of the State Addresses

Of the 30 Governors who have given their State of the State addresses this year, 17 have specifically discussed energy issues, much of the time in the context of job creation and retention.  California Governor Jerry Brown, New York Governor Andrew Cuomo, and Vermont Governor Peter Shumlin said that renewable energy would bring green jobs to their states, while Virginia Governor Bob McDonnell, Alaska Governor Sean Parnell, and West Virginia Governor Earl Ray Tomblin each said that their states’ fossil fuel resources would bring more jobs.  Governor Tomblin praised recent oil, coal, and natural gas investments and the jobs they will bring while promising that “I will do everything in my power to make sure that West Virginia is positioned to take full advantage of this opportunity” to build an ethane cracker facility, which he said would bring thousands of manufacturing jobs.  Utah Governor Gary Herbert and Maine Governor Paul LePage said that new jobs would arise from low energy costs, New Mexico Governor Susana Martinez said that the key to economic growth and environmental protection is “sensible, predictable regulations” on energy production, and Georgia Governor Nathan Deal proposed eliminating a sales tax on energy used for manufacturing as a way to retain their business.

In the face of the slow economic recovery, several Governors have proposed ideas that require no state funds or attract new private investment.  For example, Hawaii Governor Neal Abercrombie proposed legislation to incentivize companies to invest in energy infrastructure that would integrate more renewable energy into the grid, saying that “there is no legislation more critical to our future."  New York Governor Andrew Cuomo proposed several new initiatives, including attracting $2 billion in private investment for grid infrastructure and a program to increase energy efficiency in State buildings to be paid for with savings in energy costs.  Utah Governor Gary Herbert proposed creating an “energy research triangle” that would pair universities and industry to research energy production technologies.  Maine Governor Paul LePage proposed lifting a restriction on the amount of hydroelectric power produced. 

Governors commonly reflect on the previous year in their State of the State addresses to evaluate the progress that has been made.  California Governor Jerry Brown said that his State’s goal of producing 20,000 megawatts of renewable energy by 2020 was ahead of schedule and that billions of private clean energy investments had been made.  Delaware Governor Jack Markell said that hundreds of jobs were created in his State last year due to upgrades and conversions of power plants to lower emissions.  Massachusetts Governor Deval Patrick cited his State’s policies on renewable energy in discussing that industry’s seven percent growth in 2011.  Colorado Governor John Hickenlooper and West Virginia Governor Earl Ray Tomblin referenced signing an agreement with other states to work with automakers on converting their vehicle fleets to run on natural gas.  Governor Hickenlooper also noted an agreement between energy companies and environmental groups to disclose materials used in the hydraulic fracturing process.

Some Governors used their speeches to urge federal government action on energy issues.  Utah Governor Gary Herbert said that the federal government needed to continue working with the State on siting and permitting of energy development.  Virginia Governor Bob McDonnell called on President Barack Obama and the U.S. Congress to accelerate the timetable for allowing oil and gas drilling off Virginia’s coast.  West Virginia Governor Earl Ray Tomblin said that he would continue to fight against attempts to increase regulation of coal and other energy resources.

The State of the State addresses announced a range of other proposals, including:

  • Washington Governor Christine Gregoire proposing a $1.50-per-barrel tax on oil produced in Washington that would be used to improve infrastructure such as roads and bridges.
  • Oregon Governor John Kitzhaber stating that his administration will adopt a ten-year energy plan this year.
  • Maine Governor Paul LePage proposing giving ratepayers a choice of whether to purchase renewable or traditional energy.
  • Missouri Governor Jay Nixon stating his intention to work with farmers to improve their energy efficiency in order to make the State’s agriculture industry more competitive.
  • Vermont Governor Peter Shumlin proposing an increase in the amount of renewable energy required in the State’s renewable energy portfolio to 75% by 2032.

Links to all of the Governors’ addresses can be found at the State of the State Speeches Calendar on Stateline.org

National News

President Barack Obama’s State of the Union address included an overview of his energy agenda for 2012, which he began to unveil in more detail after his speech.  In his remarks, President Obama announced that he is opening 75 percent of potential offshore oil and gas reserves to development and opening enough federal land to renewable energy development to power 3 million homes.  The Defense Department will purchase much of that new renewable energy.  He also said that his administration would help develop domestic natural gas resources and separately called on Congress to pass legislation to provide production tax credits for renewable energy.  In addition, The President called for the disclosure of chemicals used in hydraulic fracturing on federal lands and proposed providing energy-efficiency incentives to manufacturers.  Since the speech, President Obama has released a “blueprint” detailing these proposals, which he calls an “all-of-the-above strategy,” and has gone on a nationwide tour to promote it.  The blueprint includes a proposal to incentivize greater use of natural gas as a transportation fuel and calls for doubling the country’s clean energy output by 2035.  State of the Union Address TranscriptWhite House and Energy Blueprint Fact SheetWhite House and Obama pitches ‘all-of-the-above’ energy strategyNational Public Radio

In the Republican response to President Obama’s State of the Union address, Indiana Governor Mitch Daniels criticized the President for rejecting the Keystone XL pipeline proposal, which he said was “perfectly safe” and “would employ tens of thousands.”  Governor Daniels called for a free-market approach to energy, with lower taxes and fewer loopholes, fewer regulations, and maximizing domestic energy production.  He also characterized the President’s energy policies as “pro-poverty” for increasing consumers’ costs while not improving public health or the environment.  Full text of GOP’s State of the Union responseMcClatchy

President Barack Obama’s State of the Union address included an overview of his energy agenda for 2012, which he began to unveil in more detail after his speech.  In his remarks, President Obama announced that he is opening 75 percent of potential offshore oil and gas reserves to development and opening enough federal land to renewable energy development to power 3 million homes.  The Defense Department will purchase much of that new renewable energy.  He also said that his administration would help develop domestic natural gas resources and separately called on Congress to pass legislation to provide production tax credits for renewable energy.  In addition, The President called for the disclosure of chemicals used in hydraulic fracturing on federal lands and proposed providing energy-efficiency incentives to manufacturers.  Since the speech, President Obama has released a “blueprint” detailing these proposals, which he calls an “all-of-the-above strategy,” and has gone on a nationwide tour to promote it.  The blueprint includes a proposal to incentivize greater use of natural gas as a transportation fuel and calls for doubling the country’s clean energy output by 2035.  State of the Union Address TranscriptWhite House and Energy Blueprint Fact SheetWhite House and Obama pitches ‘all-of-the-above’ energy strategyNational Public Radio

In the Republican response to President Obama’s State of the Union address, Indiana Governor Mitch Daniels criticized the President for rejecting the Keystone XL pipeline proposal, which he said was “perfectly safe” and “would employ tens of thousands.”  Governor Daniels called for a free-market approach to energy, with lower taxes and fewer loopholes, fewer regulations, and maximizing domestic energy production.  He also characterized the President’s energy policies as “pro-poverty” for increasing consumers’ costs while not improving public health or the environment.  Full text of GOP’s State of the Union responseMcClatchy

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Energy Update, November 18, 2011

November 18, 2011

In the States

AZ – Governor Jan Brewer has taken the final steps to withdraw Arizona from the Western Climate Initiative (WCI), the regional cap-and-trade agreement entered into by her predecessor, former Governor Janet Napolitano.  The director of the State’s Department of Environmental Quality, Henry Darwin, said that rather than subscribe to the cap-and-trade program, Arizona will join North America 2050, a group of states that will consider greenhouse gas emissions issues, but let each member State decide what emissions reduction policies make sense economically and environmentally.  Governor Brewer’s administration has also begun to eliminate rules that would have required reductions in carbon dioxide emissions in autos starting next year.  In both cases, administration officials cited new and proposed federal environmental regulations that they believe lessen the need for States to take separate action on climate and pollution issues.  Brewer withdraws Arizona from climate initiativeArizona Daily Sun

ME – Governor Paul LePage has said that he would like to halve the percentage of homes reliant on heating oil in Maine from 80 percent to 40 percent by the end of his current term in 2014.  The Governor’s plan involves increasing access to natural gas in urban areas where the population is dense enough to make installing pipelines cost-effective, and wood pellets in more rural areas.  While some lawmakers and experts think that the goal is ambitious, most agree with the idea of diversifying fuel sources for home heating.  LePage wants heating oil use cut in half by 2014Bangor Daily News

A group of 15 Governors has sent a letter to the U.S. House and Senate Appropriations Committee leadership urging them to fund the Low Income Home Energy Assistance Program (LIHEAP) in Federal Fiscal Year (FFY) 2012 at the same level as FFY 2011.  The letter said that the encroaching cold weather coupled with higher oil and propane costs make such funding timely and critical.  Under the temporary appropriations bill that funds the government through December 16, LIHEAP is cut by more than half, from $4.7 billion to $2 billion.  Signatories of the letter include Governors Hickenlooper (CO), Malloy (CT), Markell (DE), Quinn (IL), LePage (ME), O’Malley (MD), Patrick (MA), Dayton (MN), Lynch (NH), Cuomo (NY), Perdue (NC), Chafee (RI), Shumlin (RI), Tomblin (WV), and deJongh (VI).  Gov. Patrick calls on Congress to fund winter fuel assistanceMilford Daily News and Letter to Congress [pdf]Fifteen Governors

Governors Hickenlooper of Colorado, Fallin of Oklahoma, Corbett of Pennsylvania, and Mead of Wyoming have signed a memorandum of understanding (MOU) to encourage the production of affordable natural gas-powered vehicles for their fleets and for public consumption.  The MOU announces the States’ intentions to issue a joint request for proposal (RFP) “that aggregates annual State fleet vehicle procurements” in order to boost demand for the vehicles and help incentivize their design and manufacture.  The Governors also wrote that they will solicit support from other Governors prior to the issuance of the RFP.  Wyoming Governor Matt Mead’s policy director, Shawn Reese, said that “by working with other states and Wyoming’s cities, towns and counties, we can show automakers in Detroit that there is a large enough market for replacement vehicles for them to manufacture natural gas fleets that can be sold back to the public at prices comparable to traditional vehicles.”  Wyoming Gov. Mead joins multistate effort to push for affordable natural gas vehiclesWyoming Star-Tribune and Memorandum of Understanding [pdf]Four Governors

The Governors Wind Energy Coalition, a bipartisan group of 23 Governors, has written Congress urging them to extend the production tax credit (PTC) for wind energy that is set to expire at the end of 2012, specifically endorsing H.R. 3307, the American Renewable Energy Production Tax Credit Extension Act.  The Governors note that wind energy projects are beginning to slow down due to uncertainty over whether they will be eligible for the credits in coming years, and expect that if the credits are not renewed, “there will be negative impacts on the high-tech manufacturing jobs that the industry has brought to or created in our states.”  Governors urge prompt extension of wind energy tax exemptionREVE and Letter to Congress [pdf]Governors’ Wind Energy Coalition

Federal News

President Barack Obama’s administration has announced that the decision on whether to allow construction of the 1700-mile Keystone XL tar sands pipeline will be delayed until after the 2012 election.  The State Department, which has the authority to issue or deny permits on the project, says that it will review alternative routes that would avoid certain environmentally vulnerable areas, delaying the decision until early 2013.  Prior to the announcement of the delay, TransCanada, the company that would build the pipeline, suggested changing the route to avoid crossing an aquifer in Nebraska.  President Obama and the State Department had come under pressure from environmental groups who generally oppose the project, Nebraska state officials who oppose the proposed route of the pipeline because of the potential impact of a spill on environmentally sensitive areas of that state, and oil companies, labor unions, and the Canadian government who support the pipeline because of its economic and job creation potential.  U.S. delays decision on pipeline until after electionNew York Times and Keystone pipeline builder proposes changing Nebraska RouteLos Angeles Times

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