Senator Grassley (R-IA) put U.S. energy incentives in perspective at an April 3, 2014 Senate Finance Committee hearing. The following is a transcript of his remarks:
“... Many of us have been clamoring for tax reform for years now. Just because we haven’t cleaned up the tax code in a comprehensive way doesn’t mean we should pull the rug from under our domestic renewable energy producers. Doing so would cost jobs, harm our economy, the environment, and our national security…The proponents of this amendment want to hold this debate in a vacuum. It shouldn’t be held in a vacuum. We ought to do it with regard for many incentives and subsidies that exist for other sources of energy and are permanent law.
“For example, the 100-year-old oil and gas industry continues to benefit from tax preferences that benefit only their industry…we have expenses for intangible drilling costs, deductions for tertiary injections, percentage depletion for oil wells, special amortization for geological costs. These four tax preferences for this single industry result in the loss of more than $4 billion annually in revenue.
“Nuclear energy is another great example. The first nuclear power plant came online in 1958 -- 56 years ago. Nuclear receives special tax treatment for decommissioning trust funds. Congress created a production tax credit for this mature industry in 2005. Quite frankly I was a part of that – it was a bill that I helped develop. That’s available until 2020. Nuclear also benefits from Price-Anderson federal liability insurance -- talk about temporary measures becoming permanent, that was a temporary measure in 1958 and it’s been renewed through 2025. Nuclear energy also has received $74 billion in research and development dollars since 1950.
“Now, are these ‘crony capitalist’ handouts? Why is repealing a subsidy for oil and gas or nuclear energy production a ‘tax increase on energy producers and consumers’ while repealing an incentive on alternative renewable energy is not? This is all part of an intellectually dishonest argument.
“I authored [the bill that created the renewable energy production tax credit] in 1992 and when we did it, we knew it was not going to be forever. It’s going to be phased out when it’s a mature industry and it’s getting close to that now. In 2012, the wind energy was the only industry to put forward a phase out plan, but any phase out must be done – get this – in the context of comprehensive tax reform, where all energy tax provisions are on the table. And it should be done responsibly over a few years to provide certainty and ensure a viable industry.”