U.S. Senate Democrats, pushing to pass a broad energy bill next week, have developed a package that would take about $25 billion in tax breaks and other benefits from the oil industry and use the money for a vast expansion of renewable energy sources.

A tax break that has helped spur the development of windmill farms in Washington state could be extended for five years as part of the new Senate energy bill, Sen. Maria Cantwell said Wednesday. But the ability to carry that power from turbines in some of the wind-swept regions of the Northwest to the customers who need it isn't part of the proposal at this time.

Aided by a tax break that helps keep costs in line with fossil fuels, the wind-energy industry has hummed in recent years, generating annual growth rates of 25 percent or more. Wind power, once the province of a few entrepreneurial executives looking for alternatives to coal and other "dirty" fuels, now churns out enough electricity to light 3 million homes. The American Wind Energy Association (AWEA) counts more than 1,000 members, including giant companies such as General Electric. Five years ago, the trade group had just a couple hundred members. Along with the industry's growth has come new lobbying muscle, which includes a traditional lobbying tool: a map of the United States scattered with dots representing the jobs the industry creates.

The Democratic Congress is poised to pass the most green-friendly legislation in a generation. There are bills, either already on the floor or in committee, that would encourage the use of renewable fuels, improve energy efficiency and curb global warming. If there's a holdup, don't blame Republicans: Even President Bush has signaled his willingness to support some kinds of curbs in global warming. The hitch-and it's a big one-lies with the Democrats themselves. Earlier this year, in an attempt to rein in the federal deficit, House Democrats, put in place "pay-go" restrictions requiring any new entitlement spending or tax cuts to be offset by budget trims or tax increases.

Environmentalists love wind power and there is increasing bipartisan support for it among Republicans and Democrats concerned about energy security and global warming. But as wind power grows more prevalent the tax benefits from a production tax credit for wind is becoming increasingly expensive - now about $2.75 billion annually by one estimate - for an energy source produced by rich utilities that still generates less than one percent of the country's power...People are not always enthusiastic about having 400-foot high, or 122-meter, wind behemoths that sometimes kill lots of birds and bats as neighbors, as he conceded with his poster.

The desire to make amends for everything from a trip to the Oscars to a morning commute has spawned a plethora of for-profit and nonprofit carbon offset providers, whose offerings run the gamut in terms of how much they cost and what they say they will accomplish. But the growing retail market, which is largely unregulated, also is raising questions among environmentalists who say not all offsets are created equal.

A look at money spent each year on wind energy projects during the past decade shows "sort of this boom-bust cycle" as the Renewable Energy Production Tax Credit has been allowed to lapse every one or two years, said Brad Barton, director of commercialization for the DOE's office of energy efficiency and renewable energy. The tax credit provides an incentive of a 2 cent-per-kilowatt-hour tax credit for renewable electricity production, which makes wind energy more competitive with other forms of energy such as coal, hydroelectric and natural gas. Extending the PTC through 2012, which was proposed by Sen. John Thune, R-S.D., in a bill introduced earlier this month, would encourage more investment in the natural resource, Barton said.

Since the extension of the production tax credit, European wind companies have been keener on investing in the U.S. market. Several of the largest turbine producers are now selling to U.S. developers for projects, and opening offices and manufacturing plants in the United States. The federal production tax credit was extended for two years in August 2005 by President Bush. It was set to expire on Dec. 31, 2007, but was extended as one of Congress' last acts and will now run through Dec. 31, 2008. The PTC provides a 1.5 cent per kilowatt hour credit, or 1.9 cents when inflation-adjusted, to energy facilities during the first 10 years of operation.

The U.S. Energy Department issued proposed regulations for a loan-guarantee program for new, eco-friendly energy projects, like nuclear. The money - $13 billion between the 2007 adopted and 2008 requested fiscal years' budgets - would give financial backing to energy projects that haven't made it to the market. Eligible projects, in part, would use new technology to "avoid, reduce or sequester" greenhouse-gas emissions, the 2005 Energy Policy Act states.

Renewable energy is proving to be an oasis of cooperation amid conflict in Congress, but technology probably will determine how long that lasts and how much South Dakota benefits. A U.S. Senate committee last week passed a measure by a 20-3 vote increasing ethanol production seven-fold. The majority included a proxy vote by Sen. Tim Johnson, according to a spokeswoman. Sen. John Thune proposed a major tax break for wind energy, and this week will hear arguments for increasing vehicle fuel-economy standards.

An environmental group wants Congress to protect birds as part of new tax credits for wind energy currently under consideration. The tax-writing committees on both sides of the hill are working on legislation to extend production tax credits for wind power and other renewable energy. Wind power advocates are pressing for the extension of the 1.9-cents-per-kilowatt-hour credit, which they say is crucial for projects to attract funding. Michael Fry of the American Bird Conservancy will ask Congress today to be sure to link any federal tax credit or subsidy to a requirement that companies mitigate harm to federally protected migratory birds. Fry is one of several bird advocates testifying before the House Natural Resources Committee today on wind power's effects on birds and bats. ‘Any renewal of the production tax credit for wind energy should include provisions that require developers follow best management practices in avoiding and minimizing bird and wildlife impacts, Fry said in a statement released yesterday.

WASHINGTON - U.S. Rep. Richard E. Neal will begin a series of hearings tomorrow on energy and tax policy proposals that will give tax incentives to companies for using alternative sources of energy. As chairman of the House Ways and Means subcommittee on Select Revenue Measures, the Springfield Democrat will look at using tax incentives to prompt the private sector to develop or expand the use of clean and renewable energy with the goal of cutting greenhouse gas emissions.

THESE should be heady times for Vestas, a Danish firm that makes more than a quarter of the world's wind turbines. The wind business is booming, and the company said last week that it had swung into profit in 2006, thanks to an 8% rise in revenue. But there is "significant unexploited production capacity", Vestas says, due to shortages of high-quality turbine components. Other companies grumble about a lack of gearboxes and bearings. Wind firms' worries echo those in the solar-power business, which is also booming but where a shortage of polysilicon has hampered growth. Silicon is made from sand, which is abundant, but there are not enough refineries to turn it into solar-grade polysilicon. As a result, prices for silicon contracts have more than doubled, to $70 or $80 per kilogram, in the past three years, says Jesse Pichel, an analyst at Piper Jaffray. In both industries demand has rocketed and supply cannot keep up. The wind business is growing by more than 30% a year worldwide, with America leading the way. (This week Energias de Portugal became the latest European utility to invest in American wind farms, with the $2.2 billion purchase of Horizon Wind Energy.) And when a solar incentive scheme took hold in Germany in 2004-05, demand in Europe roughly doubled, says Ron Kenedi of Sharp, the biggest solar-cell maker.

The Pentagon could go "carbon neutral." Federal tax dollars could be used to buy carbon "offsets" if legislation introduced by Rep. Peter Welch, D-Vt., becomes law - creating a potential windfall for the blossoming offset industry. Legislative branch offices and all federal agencies - including massive institutions such as the State, Defense and Transportation departments - would be authorized to use portions of their budgets to buy greenhouse-gas offsets and renewable-energy credits, should the Carbon Neutrality Act of 2007 become law. Greenhouse gas offsets are commonly known as carbon offsets. Renewable energy credits, or RECs, are tradeable commodities that are generated when energy is produced by renewable sources such as wind, solar, biomass or municipal solid waste. The credits purchased by the government would be retired and thus removed from the market, Welch spokesman Andrew Savage said. Money generated through the sale of carbon offsets is used to finance renewable energy projects. Offset funds also are spent on forestry projects and the capture of methane from landfills and dairy farms that would otherwise be released into the air. There are no estimates of the cost to purchase offsets for all federal agencies and legislative offices, Welch said.

Behind the feel-good hype of carbon offsets, some of the deals don't deliver.......................Done carefully, offsets can have a positive effect and raise ecological awareness. But a close look at several transactions-including those involving the Oscar presenters, Vail Resorts, and the Seattle power company-reveals that some deals amount to little more than feel-good hype. When traced to their source, these dubious offsets often encourage climate protection that would have happened regardless of the buying and selling of paper certificates. One danger of largely symbolic deals is that they may divert attention and resources from more expensive and effective measures.

Buy an airline ticket online, and you're increasingly likely to see this pitch: Add a payment of a few dollars and finance save-the-Earth activities to offset environmental damage caused by your trip. Travel companies such as British Airways and travel sites Travelocity and Expedia are giving ticket purchasers the chance to at least assuage guilt, and possibly help the planet, by selling so-called offsets to finance green activism. Cost: About $5 and up. The travel companies pass along the money to a new breed of enterprises -some for-profit, some not -that invest in wind farms, solar energy, energy-efficiency technology or other green projects. They go by names such as Native Energy, Carbon Fund or TerraPass. But for all the good feelings that bubble up for the traveler who makes the donation, controversy nags about their effectiveness and the accountability of some of the enterprises taking money.

Policymakers have settled on 'emissions trading' as their favorite global-warming fix. But it isn't working.

March 12, 2007 issue - Global warming isn't the only debate that may be over. Governments and policymakers around the world also seem to have settled on a solution. "A responsible approach to solving this crisis," Al Gore said recently at New York University's Law School, would be "to authorize the trading of emissions ... globally." Emissions trading, also called carbon trading, is being expanded in the European Union and Japan. And in many places where it's yet to take hold, like Sacramento, Sydney and Beijing, politicians are embracing it. Nicholas Stern, former chief economist of the World Bank and Europe's foremost political expert on global warming, predicts that the value of carbon credits in circulation, now about $28 billion, will climb to $40 billion by 2010.

This should be great news for the environment, but many experts have their doubts. The notion that emissions trading is going to make a significant dent in global warming is deeply flawed, they say. Current emissions-trading schemes have proved to be little more than a shell game, allowing polluters in the developed world to shift the burden of making cuts onto factories in the developing world.

Since the oil shocks of the 1970s, governments around the world have paid plenty of lip service to renewable energies such as wind and solar power. But only a few governments have been able to engineer policies that have begun to bring alternative energies into wider use. Renewable fuels provided 18% of the world’s total electricity supply in 2004, according to figures from the International Energy Agency, a Paris-based intergovernmental organization. Almost all of that, though, came from hydropower, a source with limited growth potential because of geographic constraints. The use of wind and solar power is growing, but they still generated only 1% of global electricity production in 2004, the latest year for which figures are available.

New legislation that would require many U.S. utilities to generate 20 percent of their electricity from renewable energy resources by 2020 was introduced yesterday by Congressman Tom Udall of New Mexico. House bill 969 proposes to “amend title VI of the Public Utility Regulatory Policies Act of 1978 to establish a Federal renewable energy portfolio standard for certain retail electric utilities and for other purposes.” The bill defines a renewable energy resource as solar (including solar water heating), wind, ocean, tidal, geothermal energy, biomass, landfill gas or incremental hydropower.

Without federal support from both a long-term commitment to a production tax credit and a federal renewable portfolio standard, the future of wind power may be uncertain. Developers and investors at the 2007 Wind Power Finance and Investment Summit in San Diego voiced concern for the industry past the end of 2008 when the production tax credit expires. Much of the investment that’s been put into the developing technology has come from the incentives given through the PTC.