Thumbs up for Wyo's wind tax
Wyoming has some of the world's best winds for generating power. And wind energy developers salivate over all those big, wide-open, unpeopled spaces. It's no surprise then that turbines have been sprouting in those spaces at a rapid rate over the past year or so, upping the state's total wind generating capacity by more than 30 percent in just one year. Given Wyoming's status as an energy colony – it produced nearly half of all the coal used in the U.S. last year – it is a bit surprising the reception the state has given to wind, which has been with less than open arms.
The state banned wind farms from prime sage grouse areas, putting about half of the state's highest grade winds off-limits. It repealed its sales tax exemption for turbines. And some of its most prominent public officials have blasted the industry for running roughshod over Wyoming's wild lands and wildlife. Now, as part of a flurry of wind-hampering bills, the legislature is on the brink of passing a wind tax, and the turbine pushers are in a frenzy of worry. They’re even mimicking their colleagues in the oil and gas industry, threatening to leave the state if a tax passes.
But such a tax could be the best thing that ever happened to wind in Wyoming.
In case you hadn't been paying attention, Wyoming is run by the fossil fuel industry. And that's not just because of there are so many industry hacks lobbying in the capitol, or because the oil and gas guys finance most of the state's campaigns or even because most Wyoming politicians – I kid you not – worked in the oil, gas or coal industry at one time or another prior to, or during, and often after their political career. It's because the state’s coffers are as dependent on fossil fuel tax revenues as a baby is on his mother's breast.
In any given year, the gas and oil industry in Wyoming contributes more than $1.5 billion to state and local government budgets through severance taxes, royalties, sales/use taxes and property taxes. Coal producers add another $800 million or more annually. Those are just direct payments, and don't include the tens of thousands of jobs that the fossil fuel industry brings to the state -- – the coal mines alone employ some 18,000 people at an average salary of $65,000. Meanwhile, the wind industry contributed just $3.8 million in property taxes for 2009, in addition to a bit for state land leases (the sales tax exemption remains in effect until the end of this year).
So, when Wyoming seems to be picking on wind, while bending over for fossil fuels, it's mostly due to practical, not ideological, considerations (though polls show that more than half of the half-million people in the state don’t believe in global warming). That explains why, when the state moved to protect sage grouse "core areas" in hopes of avoiding an Endangered Species Act listing for the bird, it carefully drew the lines so as to leave the oil and gas hotspots free from regulation. State officials readily admit that the core areas were drawn not, primarily, to save the diminishing species of bird, but to keep the cash flowing and the roughnecks working. Meanwhile, many of the windy sweet spots were overlain with core areas, putting them off-limits to turbines.
The proposed Wyoming wind tax, a modest $1-per-megawatt-hour, passed the state House last week, and is headed for the Senate. At current levels of wind power generation, it would generate $5 million or so in annual revenue. That could easily double or triple by 2012, when the tax would go into effect (the Power Company of Wyoming's proposed wind farm could, alone, have three times the capacity of all of Wyoming's existing turbines). Never will it generate as much as oil and gas and coal for the state coffers, but then, wind isn't going to run out, either, or be made obsolete by climate concerns, so this is a reliable, long-term investment.
More importantly, though, the tax, in principle, puts wind power in the same category as fossil fuels in Wyoming, and makes it subject to the state's motto: "Bring on your energy projects. Then we'll tax the hell out of them." When those big turbines start adding some money to Wyoming's schools and other state programs, people are likely to start seeing them in a more favorable light. Or, at least – as they’ve done with oil and gas – they’ll be more likely to ignore their impacts (which would be good for wind, but maybe not for Wyoming).
So, to the wind industry folks who are all in a tizzy over this tax: Relax. It may make the economics a bit tougher when it comes to building a wind farm. But it could ease up the political opposition to turbines, which seems to grow daily in the state. As for the "we'll go somewhere else if you tax us" rhetoric that you stole from your oil and gas counterparts? It just does not become you.