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Inherency
Congress is lagging on extending federal tax credits for wind
now.
Richard A. Kessler Friday, May 23 2014
Updated: Friday, May 23 2014 US Senate recesses without PTC vote
http://www.rechargenews.com/wind/article1363234.ece
The US Senate recessed through the end of May without a vote on extending
several dozen federal tax credits for a range of industries including two that have
driven growth in onshore and offshore wind. Leaders of clean energy groups and
industries that serve the sector lamented the move although lawmakers inaction
came as little surprise. A group of Republican senators last week ago had halted
movement on the so-called bipartisan EXPIRE Act unless they could strip out the
renewable electricity production tax credit (PTC) for wind. Senate Majority Leader
Harry Reid, a Democrat closely allied with the White House, refused to go along and
the bill stalled. He did not schedule a vote after the Senate resumes work in June.
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Plan
The United States federal government should provide longterm extensions of tax credits for offshore wind.
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1929 stock crash and whose father won praise over decades for anticipating turns in the business cycle, often
against conventional wisdom. Mr. Levys forecast for a global recession is extreme, but its worth considering given
how much is riding on the dominant view that economies are healing. Investors have pushed U.S. stocks to record
highs, and Fed estimates have the United States growing at an annual pace of at least 3 percent for the rest of the
year and all of 2015. Investors also have poured hundreds of millions of dollars into emerging market stock funds
Business debt is too high. And confidence is fleeting, as investors saw earlier this month when stocks sold off on
worries over the stability of Portugals largest bank. In China and other emerging markets, the problem of relying on
indebted Americans to buy more of their goods each year and not selling enough to their own people means a glut
of underused factories. The
take on the burden. Emerging markets bounced back faster from the financial crisis than did rich countries,
but Mr. Levy thinks a big reason for that has made things worse. Overseas companies poured money into factories,
machines, and buildings to make things on the assumption that exports, after snapping back from recession lows,
would continue to grow at their prior pace. They have not, because companies had been investing too much to
expand production before the crisis too. You build factories and stores, and they cant pay for themselves, says
Mr. Levy, chairman of the Jerome Levy Forecasting Center, a consulting firm. Businesses cant generate profits, and
they start to contract. Compared to such fragile economies, Mr. Levy says the United States is in decent shape.
Like most economists, hes not worried about the nations 2.9 percent drop in economic output in the first quarter.
He expects growth to return, but not for long, as a recession in Europe or emerging markets spreads to the United
States. Mr. Levy says the United States is more vulnerable to troubles abroad than people realize. Exports
contributed 14 percent of U.S. economic output last year, up from 9 percent in 2002. That sounds good, but it also
makes the country more dependent on global growth, which, in turn, relies more on emerging markets. Those
Treasurys, a haven in troubled times, like never before. The yield on the 10-year Treasury note, which moves
opposite to its price, is likely to fall from 2.5 percent to less than 1 percent an unprecedented low. In 2012, when
investors feared a breakup of the euro-currency bloc, the 10-year yield fell to 1.4 percent.
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decline and the security and defence behaviour of interdependent stales. Research in this vein has been considered
at systemic, dyadic and national levels. Several notable contributions follow. First, on the systemic level. Pollins
rhythms in
the global economy are associated with the rise and fall of a pre-eminent power and
the often bloody transition from one pre-eminent leader to the next. As such, exogenous
shocks such as economic crises could usher in a redistribution of relative power (see also
Gilpin. 19SJ) that leads to uncertainty about power balances, increasing the risk of
miscalculation (Fcaron. 1995). Alternatively, even a relatively certain redistribution of power could lead to a
(20081 advances Modclski and Thompson's (1996) work on leadership cycle theory, finding that
permissive environment for conflict as a rising power may seek to challenge a declining power (Werner. 1999).
Separately. Pollins (1996) also shows that global economic cycles combined with parallel leadership cycles impact
the likelihood of conflict among major, medium and small powers, although he suggests that the causes and
connections between global economic conditions and security conditions remain unknown. Second, on a dyadic
level. Copeland's (1996. 2000) theory of trade expectations suggests that 'future expectation of trade' is a
significant variable in understanding economic conditions and security behaviour of states. He argues that
interdependent states arc likely to gain pacific benefits from trade so long as they have an optimistic view of future
trigger for decreased trade expectations either on its own or because it triggers protectionist moves by
interdependent states.4 Third, others have considered the link between economic decline and external armed
conflict at a national level. Mom berg and Hess (2002) find a strong correlation between internal conflict and
Economic conflict lends to spawn internal conflict, which in turn returns the favour. Moreover, the presence of a
recession tends to amplify the extent to which international and external conflicts self-reinforce each other
(Hlomhen? & Hess. 2(102. p. X9> Economic decline has also been linked with an increase in the likelihood of
terrorism (Blombcrg. Hess. & Wee ra pan a, 2004). which has the capacity to spill across borders and lead to
external tensions. Furthermore, crises generally reduce the popularity of a sitting government. " Diversionary
theory" suggests that, when facing unpopularity arising from economic decline, sitting
governments have increased incentives to fabricate external military conflicts to create a
'rally around the flag' effect. Wang (1996), DcRoucn (1995), and Blombcrg. Hess, and Thacker (2006) find
supporting evidence showing that economic decline and use of force arc at least indirecti) correlated. Gelpi (1997).
Miller (1999). and Kisangani and Pickering (2009) suggest that Ihe tendency towards diversionary tactics arc greater
for democratic states than autocratic states, due to the fact that democratic leaders are generally more susceptible
to being removed from office due to lack of domestic support. DeRouen (2000) has provided evidence showing that
periods of weak economic performance in the United States, and thus weak Presidential popularity, are statistically
linked lo an increase in the use of force. In summary, rcccni economic scholarship positively correlates economic
connection between integration, crises and armed conflict has not featured prominently in the economic-security
debate and deserves more attention.
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Offshore
wind energy will be an economic powerhouse for America. Harnessing the 52 gigawatts of
already-identified available Atlantic offshore wind energy just 4 percent of the estimated
generation potential of this massive resource could generate $200 billion in economic
activity, create 300,000 jobs, and sustain power for about 14 million homes. (Europe
already produces enough energy from offshore wind right now to power 4 million homes.) America is closer
than ever to bringing offshore wind energy ashore . Efforts are underway in 10 Atlantic Coast
states, with over 2,000 square nautical miles of federal waters already designated for wind energy development off
of Massachusetts, Rhode Island, New Jersey, Delaware, Maryland, and Virginia. Environmental reviews finding no
significant impacts have been completed, and leases are expected to be issued for some of these areas by the end
Despite this progress, leadership is urgently needed at both the state and
federal level to ensure offshore wind energy becomes a reality in America: President
Obama should set a clear national goal for offshore wind energy development, and
each Atlantic state governor should also a set goal for offshore wind development off their shores. These goals
must be supported by policies that prioritize offshore wind energy and other efforts to
of the year.
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foreign resources for several decades. Our dependence has not been on just any ol country.
Specifically, we have been dependent on the Organization of Exporting Countries for our yearly imports of
To be more specific, the latest data from the United States Energy
Information Administration shows that we imported 5.83 million barrels of petroleum
a day from OPEC countries or 55 percent of our net imports for 2012. This fact quickly
petroleum.
answers the previous question of why our market is disrupted by Middle Eastern instability. Naturally, looking at this
data, it would be accurate to say that energy independence needs to occur sooner than late r.
Although this is an accurate statement, the broader scope of energy security cannot be ignored. No one would
argue that the United States is a world super power. However, as instability continues in the Middle East, and the
demand for natural resources in America grows, an obvious tie between our power and our natural resource
stability can be seen. As the oil and natural gas supply increases with each new day here in the United States, it is
vital that our federal government and our individual states recognize the importance of free enterprise. Rather than
hamper new development and exploration, our nation should be doing everything possible to encourage new oil
and gas business. Will oil and gas be the fuel of the future? Authorities on all fronts argue this issue daily. For today,
oil and natural gas are the leading fuels that literally power our country. Petroleum products can be found in nearly
any item you pick up. What are the tangibles of energy security? For starters, the U.S. Department of Defense relies
on petroleum for more than 75 percent of its needs. Another example of energy security is the fact that nearly
every farming and manufactured food and household product is made through the use of petroleum. Just as Russia
has done with the Ukraine by cutting off natural gas supplies, similarly, if Saudi Arabia decided to diminish their
imports to the United States, immediate chaos would be thrown into the U.S. trade market. What is the solution to
achieving energy independence and security? The United States is on the right path. Developing our own
technologies and our own natural resources will only speed up the process of establishing our long-term energy
security. The ripple effect, however, on our energy security and independence starts small. For example, when a
local or parish/county government overregulates or prohibits oil and gas operations, even this action decelerates
our long-term safety and strength as a nation.
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raise similar issues because of the mixed strategic messages that are being sent. Of course, large wealth [*989] transfers have
the smooth functioning of the world economy. The security challenges associated with preserving access to oil are complicated by
geographical "chokepoints," through which oil flows or is transported, but which are vulnerable to piracy or closure. n75
"Flashpoints"
The
Turkish Straits and Caspian Oil. The term "Turkish Straits" refers to the two narrow
straits in northwestern Turkey, the Bosporus and the Dardanelles, which connect the Sea of Marmara with the
Black Sea on one side and the Aegean arm of the Mediterranean Sea on the other. Turkey and Russia have been
locked in a longstanding dispute over passage issues involving the Turkish Straits.
the [*991] Yom Kippur War in 1973, Egypt closed the strait as a means of blockading the southern Israeli port of Eilat. n87
n88 The 1936 Montreux Convention puts Turkey in charge of regulating traffic through the straits; n89 yet Turkey has been hard
pressed to stop an onslaught of Russian, Ukrainian, and Cypriot tankers, which transport Caspian Sea oil to markets in Western
Europe. n90 Because of the very heavy shipping traffic and very challenging geography, there have been many collisions and
groundings in the past, creating terrible pollution incidents and death. n91 Thus far, none of these incidents have been attributed to
state-on-state-conflict or terrorism; n92 however, the confined waterway is an especially attractive target because of the grave
economic and environmental damage that would result from a well-timed and well-placed attack on a loaded tanker. The issues
surrounding the straits are also a subset of larger problems associated with the exploitation of Caspian oil, including severe pollution
of the Caspian Sea as a result of imprudent extraction techniques, as well as the ever-present potential for conflict among the
various claimants to the Caspian's hydrocarbon resources due to an inability of the various Caspian littoral states to agree on their
because both claimants have, in the past, used modern military platforms to patrol the areas of their claims in which there are
suspected oil and gas deposits in the seabed. n94 In September 2005, for example, China dispatched five warships to disputed
waters surrounding its oil and gas platforms, which were spotted by a Japanese maritime patrol aircraft. n95 There have been other
similar military-to-military encounters. n96 Given the fact that both countries have modern armed forces and are comparatively
reserves are projected to be in the region (including 13 percent of the world's petroleum and 30 percent of natural gas)." n97 However, given the very
small margins that transporters earn transporting oil from point A to B, n98 shipping companies are always in search of shorter routes to transport oil to
market. As the thawing of the Arctic Ocean continues as a result of climate change, n99 this may create new shipping routes that transporters of [*993] oil
and other goods will use to maximize their profits and minimize their transit times. As supplies of readily exploitable crude oil are reduced, the probability
increases that some of this trade will result from exploitation activities in the land and littoral areas adjacent to the Arctic Sea. This development is
concerning for a number of reasons: (1) the area is very remote and could provide a safe haven to pirates seeking to hijack cargoes; (2) the environmental
sensitivity of the area, and the concomitant difficulty of mounting a cleanup effort, means that an oil spill in that marine environment will be much more
persistent than an oil spill in temperate waters; n100 (3) the Arctic presents unique navigational difficulties due to the lack of good charts, navigational
aids, and communications towers, as well as the impacts of extreme cold on the operational effectiveness of systems; n101 (4) the unsettled nature of
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claims by various countries, including the United States, to the seabed continental shelf resources in the littoral areas off their coastlines creates the
potential for military competition and conflict over these claims. n102 The International Maritime Organization ("IMO") is now circulating draft guidelines
for ships operating in Arctic areas to promote - but not require - ship hardening against an iceberg strike, better crew training, and environmental
protection measures. n103 These guidelines are merely advisory and can only be implemented via the flag states. n104 Also, neither IMO nor any of the
UN Law of the Sea Institutions have mandatory jurisdiction over any of the flashpoint issues relating [*994] to competing continental shelf claims in the
The
OCS final rules are important in that they create the potential for renewable energy
to displace a portion of U.S. fossil fuel use. Such a shift will generate environmental
benefits, reduce U.S. dependence on foreign sources of energy, and create
new renewable energy jobs.
developers to initiate projects on the OCS with newer technologies, such as tidal, wave, and thermal energy.
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climate, Christiana Figueres, the head of the UNFCCC (United Nations Framework Convention on Climate Change) used even
stronger language, speaking of the tragedy of the U.S. position: The tragedy of the position that the U.S. is taking is that not only
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vision of Americas foreign policy assetsparticularly in the key cases of Iran, Russia, and Egyptsuggests that he
feels the country has so declined, not only in real power but in the power of example, that it lacks the moral
authority to project soft power. In the 1970s, many also considered the US in decline as it grappled with
counterinsurgency in faraway lands, a crisis due to economic stagnation, and reliance on foreign oil. Like Obama,
Henry Kissinger tried to manage decline in what he saw as a multipolar world, dressing up prescriptions for policy
as descriptions of immutable reality. In the 1980s, however, soft power played a crucial part in a turnaround for US
foreign policy. Applying it, President Reagan sought to transcend a nuclear balance of terror with defensive
technologies, pushed allies in the Cold War (e.g., El Salvador, Chile, Taiwan, South Korea, and the Philippines) to
liberalize for their own good, backed labor movements opposed to Communists in Poland and Central America, and
called for the Berlin Wall to be torn downover Foggy Bottom objections. This symbolism not only boosted the
perception and the reality of US influence, but also hastened the demise of the USSR and the Warsaw Pact. For
Barack Obama, this was the path not taken. Even the Arab Spring has not cured his acute allergy to soft power. His
May 20, 2011, speech on the Middle East and Northern Africa came four months after the Jasmine Revolution
emerged. His emphasis on 1967 borders as the basis for Israeli-Palestinian peace managed to eclipse even his
broad words (vice deeds) on democracy in the Middle East. Further, those words failed to explain his deeds in
continuing to support some Arab autocracies (e.g., Bahrains, backed by Saudi forces) even as he gives tardy
rhetorical support for popular forces casting aside other ones. To use soft power without hard power is to be
The threat of nuclear terrorism looms much larger in the publics mind than the threat of a full-scale
nuclear war, yet this article focuses primarily on the latter. An explanation is therefore in order before proceeding.
Albright, a former weapons inspector in Iraq, estimates those odds at less than one percent, but notes, We would
never accept a situation where the chance of a major nuclear accident like Chernobyl would be anywhere near
1% .... A nuclear terrorism attack is a low-probability event, but we cant live in a world where its anything but
include estimating the risk of nuclear terrorism as one component of the overall risk. If that risk, the overall risk, or
both are found to be unacceptable, then the proposed remedies would be directed to reduce which- ever risk(s)
warrant attention. Similar remarks apply to a number of other threats (e.g., nuclear war between the U.S. and China
over Taiwan). his article would be incomplete if it only dealt with the threat of nuclear terrorism and neglected the
threat of full- scale nuclear war. If both risks are unacceptable, an effort to reduce only the terrorist component
societys almost total neglect of the threat of fullscale nuclear war makes studying that risk all the more important . The cosT of World War iii
would leave humanity in great peril. In fact,
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The danger associated with nuclear deterrence depends on both the cost of a failure and the failure rate.3 This
section explores the cost of a failure of nuclear deterrence, and the next section is concerned with the failure rate.
While other definitions are possible, this article defines a failure of deterrence to mean a full-scale exchange of all
nuclear weapons available to the U.S. and Russia, an event that will be termed World War III. Approximately 20
million people died as a result of the first World War. World War IIs fatalities were double or triple that number
chaos prevented a more precise deter- mination. In both cases humanity recovered, and the world today bears few
scars that attest to the horror of those two wars. Many people therefore implicitly believe that a third World War
would be horrible but survivable, an extrapola- tion of the effects of the first two global wars. In that view, World
War III, while horrible, is something that humanity may just have to face and from which it will then have to recover.
In contrast, some of those most qualified to assess the situation hold a very different view. In a 1961 speech to a
joint session of the Philippine Con- gress, General Douglas MacArthur, stated, Global war has become a
No
longer does it possess even the chance of the winner of a duel. It contains now only
the germs of double suicide. Former Secretary of Defense Robert McNamara ex- pressed a similar view:
Frankenstein to destroy both sides. If you lose, you are annihilated. If you win, you stand only to lose.
If deterrence fails and conflict develops, the present U.S. and NATO strategy carries with it a high risk that
Western civilization will be destroyed [McNamara 1986, page 6]. More recently, George Shultz,
William Perry, Henry Kissinger, and Sam Nunn4 echoed those concerns when they quoted President Reagans belief
that nuclear weapons were totally irrational, totally inhu- mane, good for nothing but killing, possibly destructive of
life on earth and civilization. [Shultz 2007] Official studies, while couched in less emotional terms, still convey the
horrendous toll that World War III would exact: The
impact winter caused by ash and dust from a large asteroid or comet striking Earth. The TTAPS report produced a
heated debate, and there is still no scientific consensus on whether a nuclear winter would follow a full-scale
nuclear war. Recent work [Robock 2007, Toon 2007] suggests that
lasting climatic consequences due to the large volumes of smoke that would be generated by fires in
modern megacities. While it is uncertain how destructive World War III would be, prudence dictates that we apply
the same engi- neering conservatism that saved the Golden Gate Bridge from collapsing on its 50th anniversary
and assume that
enough, as am I, to remember that some 150,000 human beings were evaporated in August 1945. What is not
generally realised is that the weapons used in Japan were mere firecrackers compared to what is available today.
We must now consider the instantaneous deaths of millions. The cause of non-proliferation was greatly hampered
by the lies of Bush and Blair over Iraq. But there is a real and increasing threat. There is no military need or use for
the horrible instruments. Not from Israel, and certainly not from the UK, where 25bn is foolishly allocated for their
renewal. Israel is the only country with such arms whose very existence has been threatened by Iran. And Iran has
directly violated the non-proliferation treaty for decades, not years, as carefully documented by David Albright and
colleagues at the Institute for Science and International Security. The poison of weapon development has spread
from North Korea to Libya, even to Syria, all regimes with the blood of their citizens on their hands.
It is
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proliferation that is the huge threat. Every country that develops these
weapons represents a huge increase in the threat to civilisation. Every weapon
produced increases the possibility of their use, whether on purpose, by accident, or
by terrorism. It is unlikely that Iran's programme can be stopped, and military action is useless, stupid and
counterproductive. But no country should be allowed such production with immunity. Some international actions,
influenza can spread quickly, this lag time could potentially lead to a global influenza pandemic, according to the
Centers for Disease Control and Prevention (9). The most recent scare of this variety came in 1918 when bird flu
managed to kill over 50 million people around the world in what is sometimes referred to as the Spanish flu
pandemic. Perhaps even more frightening is the fact that only 25 mutations were required to convert the original
viral strain which could only infect birds into a human-viable strain (10).
the federal government recognizes the urgent need to move away from
conventional energy resources and move toward alternative renewable energy
resources such as offshore wind farms . Several issues arising under the new legislation have been
identified and must be improved upon if the United States is serious about becoming a
global leader in the offshore wind energy industry. While an OZMP is one
sign that
recommendation for how the federal government may attempt to streamline the regulatory process and [*247]
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plan for cumulative impacts, there are certainly other viable options that the government should take into
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Solvency
New and more permanent investment tax credit key to the
future of offshore wind development.
Clean Energy Leadership Institute, Boosting Off-Shore Wind: S. 401
Incentivizing Off-Shore Wind Power Act December 2, 2013
http://www.cleanenergyleaders.org/#!Boosting-Off-Shore-Wind--S-401-IncentivizingOff-Shore-Wind-Power-Act-/cakg/F75C0686-B9CC-4B06-979E-DBBD6E6AE488
Off-shore wind is an enormous untapped renewable energy resource for the United
States. Just as the production tax credit is boosting on-shore wind farms, the offshore wind market is in need of a federal tax incentive to spur this emerging
industry. The Incentivizing Off-Shore Wind Power Act (S. 401) would extend the
investment tax credit (expiring at the end of 2013) for the production of electricity
from offshore wind and incentivize key projects just ramping up. Off-shore wind
power on the Great Lakes and U.S. coastlines provides an untapped resource four
times the energy potential of the entire U.S. electric power system.[1] The Obama
Administration has made commitments to offshore wind through the National
Offshore Wind Strategy and Climate Action Plan, but federal policy can also play a
role through legislation. S. 401 Incentivizing Off-Shore Wind Power Act will: allow a
30% investment tax credit (ITC) for the first 3 GW of qualifying offshore wind
projects provide a tax credit, that once awarded, will allow companies five years to
install the project.[2] The Department of Energy identifies one of the key industry
challenges for off-shore wind as the high capital cost of deployment.[3] Off-shore
wind development faces the double challenges of high initial capital cost and longer
development timelines (roughly five to seven years). Most projects, scheduled to
come online in 2017, are at the beginning stages of securing financing. [4] Such
long-term investment requires separate incentive from the on-shore production tax
credit (PTC). Offshore wind investment tax credits are considered vital for this new
industry because of long lead times and construction of wind turbines.[5] There are
thirteen in-progress U.S. offshore wind projects. Located in ten states on the
Atlantic, Pacific, Great Lakes and Gulf of Mexico coasts, none of these projects is
currently in operation. On the Atlantic coast, off-shore wind has the capability to
provide peak productivity at peak demand hours outside of key urban areas.
Offshore wind projects are also well placed to enter into power purchase
agreements with neighboring utilities. The Cape Wind Project in Massachusetts has
already partnered with NSTAR Electric. Between 2006 and 2012, DOE provided $300
million in funding for off-shore wind projects (72 separate grants, partnering with 30
private industry firms).[6] The Department of Interior has begun holding
competitive leases for off-shore wind projects in federal waters as a part of the
Climate Action Plan. However, executive actions cannot be the only factors in
helping off-shore wind succeed. Stable federal tax policy will help reduce costs and
speed up deployment. According to the Department of Energys National Offshore
Wind Strategy, the U.S. offshore wind industry has the potential to support 200,000
manufacturing, construction, operation, and supply chain jobs and spur $70 billion
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