Investor jostles U.S. Congress on energy subsidies

America's political divide is frustrating at least one venture capitalist who is expect more government support for renewable energy technology development.
Written by David Worthington, Contributor on

Sometimes there's a story within a story, and my article about Primus Green Energy (PGE) presented the opportunity to discuss investor dismay over the U.S. partisan divide's impact on renewable energy development.

Israel Corporation has invested millions into the New Jersey start-up. CEO Dr. Yom-Tov Samia expressed a deep frustration over U.S. politics, criticizing what he perceives to be lackluster government support for alternative energy. "I do not like to play games," the former Israeli Defense Force Major General said.

I later learned that his remarks were directed at both Congress and the State of New Jersey, which recently exited a state cap-and-trade system that financed new energy technology under Governor Chris Christie. Congress has been slow to renew key tax credits that benefit renewable energy producers.

Congressional Republicans are far liklier to ally with fossil fuel producers and are adverse to renewing renewable energy subsidies. Party members in general are sour on renewable energy. An effort to extend an income tax credit for wind energy recently failed in Congress, leaving the industry bracing for job losses after a boom period.

I overheard one VIP saying that it is amazing how Democrats were now the party supporting renewables, and Republicans have become fossil fuel diehards. "It wasn't always that way," he added. (Which is true of many policies that were once considered bipartisan before President Obama's election.)

Primus' vice president of business development George Boyajian explained that PGE is appreciative of steady state and federal support. That support has come from officials in both parties.

New Jersey governor Chris Christie, while not in attendance, sent a surrogate to reaffirm his administration's commitment to biofuels under its 2011 energy master plan; Christie also sent a congratulatory personal letter for the occasion.

While representatives from both major parties were in attendance on PGE's behalf, the partisan divide was clear. Republican Congressman Leonard Lance waxed poetic on deregulation and "free markets," as well as touting a GOP backed house bill that some pundits say would do little in the way of creating jobs.

The Department of Agriculture's Howard Henderson held the Democratic Party line. He said that Primus was leveraging government research that was backed by the Obama administration. Henderson also championed a Senate farm bill that passed yesterday that includes funding for biofuel research. Lance, who has regularly broken away from his party on renewable energy votes, also expressed his support for the bill.

New Jersey Democratic Assemblyman Upendra J. Chivukula brought out the flamethrower, criticizing Congress's inaction on tax credits, as well as accusing Christie of giving renewables "the cold shoulder" and for lacking a vision for the future. "Innovation doesn't come cheaply; nuclear and coal power received subsidies," he said.

Another VIP highlighted the dichotomy between how when the Obama administration writes a check it's ‘bad,' but it's ‘good' when Republican governors, who have more flexibility to act, spend millions in subsidies to attract businesses to their states.

The partisan divide is clear, and there is no doubt why Samia expects more from the United States. A revised national energy policy is necessary, but any grand bargain is elusive in light of Congress's willful failure to compromise.

(image credit: thefrisky.com)

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