for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Oil and Gas

Green energy seals U.S. spending deal for many Democrats

WASHINGTON, Dec 16 (Reuters) - For many energy-minded Democrats, the massive deal on the U.S. government spending bill was less about a loss of the long-standing ban on crude oil exports than big gains for solar and wind power.

Tax breaks for green energy have for years been like a neglected child, often included at the last minute in end-year legislation or left to expire and then extended for a year or two, sometimes retroactively.

But this time support surged. Democrats sensed they could get years of certainty for investments in green power worth billions of dollars in exchange for repealing the oil export ban, a measure that would not likely result in shipments anytime soon due to a growing glut in global crude supplies.

Minimal exports, at least for years, would also mean less impact from new drilling, less oil traffic on rail lines, potentially fewer job cuts at refineries that many Democrats had been concerned about. Some Democrats also worried that allowing oil exports without boosting alternative energy would send the wrong signal after the United States pushed for an agreement in global climate talks in Paris this month.

Including extensions of tax credits for green energy “were the linchpin to getting a deal to lift the oil export ban,” said Senator Heidi Heitkamp, a Democrat from North Dakota, the No. 2 oil-producing state.

Heitkamp, who voted for lifting the ban in committee earlier this year, had held meetings since September with senators in her party, who had reservations about lifting the trade restriction on its own.

One of those she met with was Senator Martin Heinrich, from New Mexico, who put solar panels on his house a decade ago. Without the green tax credits in the bill, “there wouldn’t have been any negotiation or deal,” Heitkamp said.

The $1.15 trillion government spending deal includes a five-year retroactive extension of the production tax credit for wind power that expired last year for projects through 2019. The solar investment tax credit was extended for five years.

Lawmakers hope to pass the bill in the House of Representatives and the Senate in coming days, before sending it to President Barack Obama, who is expected to sign it.

Solar and wind power also got a boost from the White House. After repeatedly saying Obama was opposed to lifting the oil export ban, the White House, a player in shaping the bill, changed its message just before congressional leaders struck the deal. On Monday, the White House said for the first time that Obama would not object to trading oil exports for green tax credits.

Days after nearly 200 countries reached the climate agreement in Paris, and years before Obama’s clean power plan to cut carbon emissions from electricity generation is set to begin, the White House was eager to lend support to green energy.

Many Democrats did not get all they wanted, after Koch Industries Inc and other energy interests lobbied conservative Republicans not to accept a trade that would help renewable energy.

Senator Edward Markey, a Massachusetts Democrat, fought bitterly against lifting the oil export ban, but even he saw the potential of a deal, though he wanted a longer extension for wind and solar of 10 years or more.

“If we are going to honor the spirit of the agreement just reached in Paris, we should have equality of treatment in oil and in wind and solar,” Markey said hours before congressional leaders struck the deal.

The green energy industry rejoiced over what it saw as a win. Rhone Resch, president of the Solar Energy Industries Association, said the extension of the investment credit would add 140,000 U.S. jobs in the solar industry, a spike of 70 percent, and $125 billion in new investments in private businesses.

Shares in solar companies soared on Wednesday. Sunrun Inc finished up 23 percent at $11.63 a share, while SolarCity Corp shares rose 34 percent to $53.69 per share, both on the Nasdaq. (Reporting by Timothy Gardner; Editing by Jonathan Oatis)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up