Yesterday, the House passed a bill designed to punish the oil and gas industry and reward producers of alternative energy. I voted against the bill because it raises taxes on domestic oil and gas companies and because it’s wrong to pit one sector of the energy industry (oil and gas) against another (renewables). This $18 billion tax increase on domestic oil and gas companies will be passed straight to consumers in the form of higher gas prices at the pump.

If our goal is to make America energy independent then we need to expand access to our vast domestic supply in places like the Outer Continental Shelf, the Arctic National Wildlife Refuge, and the Mountain West. We shouldn’t raise taxes on the largest and most productive segment of the energy industry in order to subsidize the smaller, less productive segments. Alternative energy is an important part of the solution, but the renewable industry must stand on its own two feet without federal support or intervention. The free market should drive the solutions to our energy problems, not the federal government.

Ironically, the same day the House passed this misguided bill, a drop in wind energy production triggered an electrical emergency in the Texas power grid. Below is an article about last night’s stage two emergency and a list of the bill’s major provisions.

Loss of Wind Causes Texas Power Grid Emergency
Wed Feb 27, 2008 8:11pm EST

HOUSTON (Reuters) - A drop in wind generation late on Tuesday, coupled with colder weather, triggered an electric emergency that caused the Texas grid operator to cut service to some large customers, the grid agency said on Wednesday.

Electric Reliability Council of Texas (ERCOT) said a decline in wind energy production in west Texas occurred at the same time evening electric demand was building as colder temperatures moved into the state. The grid operator went directly to the second stage of an emergency plan at 6:41 PM CST (0041 GMT), ERCOT said in a statement.

System operators curtailed power to interruptible customers to shave 1,100 megawatts of demand within 10 minutes, ERCOT said. Interruptible customers are generally large industrial customers who are paid to reduce power use when emergencies occur.

No other customers lost power during the emergency, ERCOT said. Interruptible customers were restored in about 90 minutes and the emergency was over in three hours.

ERCOT said the grids frequency dropped suddenly when wind production fell from more than 1,700 megawatts, before the event, to 300 MW when the emergency was declared.

In addition, ERCOT said multiple power suppliers fell below the amount of power they were scheduled to produce on Tuesday. That, coupled with the loss of wind generated in West Texas, created problems moving power to the west from North Texas.

ERCOT declares a stage 1 emergency when power reserves fall below 2,300 MW. A stage 2 emergency is called when reserves fall below 1,750 MW. At the time of the emergency, ERCOT demand increased from 31,200 MW to a peak of 35,612 MW, about half the total generating capacity in the region, according to the agencys Web site.

Texas produces the most wind power of any state and the number of wind farms is expected to increase dramatically as new transmission lines are built to transfer power from the western half of the state to more populated areas in the north.

Earlier on Tuesday, grid problems led to a blackout in Florida that cut power to about 1 million electric customers across that state for as much as four hours.

PROVISIONS OF THE TAX BILL

• $17.71 billion in tax increases on certain energy producers over ten years;
• Disincentives for domestic energy production and investment, making foreign energy investment and reliance more attractive;
• The application of Davis-Bacon prevailing wage requirements to all tax-credit bonds;
• The violation of the allowable threshold for the Unfunded Mandates Reform Act;
• The use of a corporate estimated tax payment shift (to meet Washington’s arbitrary budget scoring rules) that has real-world implications requiring the surrender of more cash to the federal government earlier than otherwise necessary; and
• The termination of the New York Liberty Zone program in such a way that yields a $2 billion windfall for New York for any transportation infrastructure project. This provision might be construed as an earmark for New York City.