What's at stake: new manufacturing jobs

Cross-posted from National Journal's Energy & Environment Expert Blog.

As a new study released yesterday by Navigant Consulting reveals, one of the things at stake in year-end legislative deliberations, although it would be included in a tax bill, rather than a spending bill, is new American manufacturing jobs in the wind power industry.

Navigant finds that with stable tax policy, the wind industry can create and save 54,000 American jobs in the next four years, including growing the wind manufacturing sector by one third to 46,000 American manufacturing jobs. This will keep the wind sector on track toward supporting the 500,000 jobs by 2030 envisioned in a report by the U.S. Department of Energy during the George W. Bush administration.

The bad news: Navigant also finds that if Congress allows the Production Tax Credit (PTC) for wind to expire, jobs in the wind industry will be cut in half, meaning a loss of 37,000 American jobs and a one-third cut to American wind manufacturing jobs, while private investment in the industry would drop by nearly two thirds. The report can be found here.

American manufacturing jobs are coming back, with tens of thousands of new jobs from wind power. But these jobs could vanish if Congress allows the Production Tax Credit to expire, in effect enacting a targeted tax increase and sending our jobs to foreign countries. Congress must act now to keep this American manufacturing success story going.

With the support of a stable PTC, wind energy is powering one of America’s fastest growing manufacturing sectors. Over the last six years, U.S. domestic production of wind turbine components has grown 12-fold to more than 400 facilities in 43 states and the domestic content in a typical turbine has risen from 25 percent in 2005 to 60 percent, shifting manufacturing jobs from overseas back to the U.S.

The Navigant study finds that wind energy’s geographically diverse manufacturing base would spread job gains around the country. States that would see significant job and private investment gains from a PTC extension include Colorado, Texas, Iowa, Illinois, Pennsylvania, California, Oregon, North Dakota and Ohio.

“We have made a significant investment during the last three years creating several hundred jobs for the state of Illinois to support the wind industry domestically,” said Terry R. Royer, CEO of Winergy Drive Systems Corp., a wind equipment manufacturer based in Elgin, Ill. “With the uncertainty of the PTC extension, we are seeing the hesitation of our customers to make continued commitments for orders in late 2012 and 2013. An immediate extension is needed to support the investment we have made in our operations and secure the jobs that have been created.”

But, with a job-killing tax increase on the horizon and the PTC's future uncertain, businesses are hesitant to plan future US wind projects, American manufacturers have seen a drop in orders, and layoffs have already started.  For the purposes of the American wind industry manufacturing sector, which needs lead time to make its products, the PTC effectively expires at the end of this year.

Bipartisan legislation (H.R. 3307, the “American Renewable Energy Production Tax Credit Extension Act”) recently introduced by Representatives Dave Reichert (R, WA-08) and Earl Blumenauer (D, OR-03) would extend the PTC for wind energy for four years. This legislation has attracted the support of 36 cosponsors, including 11 Republicans.

H.R. 3307 also recently received the endorsement of a broad coalition of more than 370 members, including the National Association of Manufacturers, the American Farm Bureau Federation, the Edison Electric Institute, the Western Governors’ Association, the United Steelworkers and many members of the environmental community. A four-year PTC extension also has the support of the bipartisan Governors’ Wind Energy Coalition, comprised of 23 Republican and Democrat Governors from across the U.S.

As families across our country struggle with unemployment, and as businesses are cutting back just to survive, it’s past time for the U.S. Congress to focus its ideas and efforts on proposals that will create jobs and get our economy moving again. Extending this key tax incentive for wind and other forms of renewable energy generation is one of the best ways to spur economic development and create the good jobs we need.

A vote for a PTC extension is a vote for growing clean, homegrown, affordable energy resources and badly needed new American manufacturing jobs.