Mar 25 - McClatchy-Tribune Regional News - Lisa Vorderbrueggen Contra Costa Times, Walnut Creek, Calif.

Federal wind and solar tax credits will expire this year and cost the Bay Area much-needed jobs and economic investment unless the Senate and the president act quickly on a renewable energy bill passed in the House, warned Rep. Jerry McNerney, D-Pleasanton.

"Inconsistent support from the government is allowing this technology to go overseas," said McNerney, who worked as a wind energy consultant prior to his election to Congress in 2006. "We want to make sure we institute policies right here in the U.S. that encourage and help renewable industries become settled."

Flanked by three Bay Area renewable energy industry executives at a news conference Monday, McNerney stood in the warm sun near solar panels that help power Walnut Grove Elementary School.

The wind and solar experts said the uncertain future of $18 billion in tax incentives has already hurt the renewable energy business.

They also cited a report's findings that if the federal government fails to extend the program, the U.S. could in 2009 lose up to 116,000 jobs and $1.9 billion in investments, and sustain a sharp slowdown in what has been a growing industry.

"It's crucial that the federal government deliver an extension," said Mark Tholke, a project manager with enXco, a wind energy company with offices in San Ramon and Tracy. "I can see no other route than layoffs if we can't get a production tax credit extension. It's so tremendously valuable to wind energy production and viability,

and without it, we can't compete."

But while few dispute the need for expanded use of renewable energies, particularly given steep prices at the pump, the wind and solar business is caught in political crossfire.

The House passed the Renewable Energy and Energy Conservation Tax Act in February but it has stalled in the Senate and President Bush has threatened to veto it.

Critics oppose the bill's provision to fund the $18 billion renewable energy program out of tax incentives currently given to oil and natural gas companies to encourage research and development of domestic supplies.

"It's the right place to do it," McNerney said. "Oil companies are making record profits. This allows us to shift a subsidy from a highly developed, established business that is highly profitable that doesn't need the tax subsidy."

Oil and gas companies are reinvesting their profits to meet the growing U.S. demand for domestic energy along with a reduction in dependence on foreign sources, countered American Petroleum Institute spokesman Ray Connolly.

"We need to produce as much domestic energy of all types as possible, and that includes renewable energy," Connolly said. "But the way to encourage it is not to change the tax law in such a way that provides a disincentive for domestic oil and natural gas development."

Severin Borenstein, director of the University of California Energy Institute, disagreed.

Oil companies don't need exploration tax breaks because the U.S. will never produce enough oil to affect the world market, he said.

And as long as Americans remain unwilling to pay the true cost of fossil fuels -- taking into account pollution, traffic congestion and greenhouse emissions, for example -- shifting the money into renewable energy is a good idea, he said.

"It won't make a huge difference in the overall energy supply, but it will make a huge difference in whether renewables continue to grow," Borenstein said. "If we cut them off, it will choke the market."

Lisa Vorderbrueggen covers politics. Reach her at 925-945-4733, lvorderbrueggen@bayareanewsgroup.com or http://www.ibabuzz.com/insidepolitics.