President speaks on energy policy, tax incentives at TPI in Newton

President Barack Obama called on Congress to extend the wind Production Tax Credit (PTC) on Thursday afternoon during a policy speech at TPI Composites in Newton. The president touted his administration's efforts on bolstering renewable energy and cutting U.S. reliance on foreign produced oil as well as writing a "to-do list" for Congressional leaders.

"This industry, thanks in large part to some very important tax credits, has now taken off," Obama said in a speech to TPI employees, their families, local volunteers and Newton city officials. "The state of Iowa now gets nearly 20 percent of all your electricity from wind. Overall, America now has enough wind capacity to power 10 million homes. This is an industry on the rise. And this is an industry that's putting people to work. You know this first hand."

The president used Newton as a symbol in his speech of economic recovery and said the Newton workforce "adapted" after the departure of appliance manufacturer Maytag in 2007.

"Some of the workers here used to build washers and dryers, and now they're part of the future," Obama said. "That's the story of Newton."

Touring the plant with TPI Newton's General Manager Mark Parriott, Obama observed different stages in the wind blade building process. The president began his tour observing UD 9700 fiberglass sheets, a malleable material that makes up the majority of the blade. Plant workers told the president that the material did not harden until it was combined with a resin in the molding process.

As he went to the different production areas, Obama, with his dress shirt sleeves rolled up, asked the employees explaining the stations, "OK, what do you guys have going on here?" The plant was quiet, as facility administration had moved around the second and third shift production schedules to accommodate the president's visit. Near one of the blade mold prepping areas, Obama went up to a young worker and shook his hand, commenting that he was the youngest worker he had seen to that point on his tour.  

After the National Anthem, sung by Newton Senior High School student Dani Peters. and a pre-speech address given by U.S. Secretary of Agriculture and former Iowa Gov. Tom Vilsack, the president was introduced by Quinton Gearhart. He is a former Maytag employee who worked the paint department and is one of the thousands of workers who lost their jobs when the plant closed. He said he was one of TPI's first-round hires in June 2008. Gearhart now works mechanical maintenance, and said he is "proud of the work we do."

"I'm glad the president is here today to push the extensions of these tax credits," Gearhart said. "It would help our business and hundreds of families right here in Newton and thousands of families like mine in communities across the country." 

During his speech, Obama cited that the state of Iowa has more wind energy jobs than in any other state. He called that "a big deal." The Iowa congressional delegation is in full support of an extension of the PTC, as is a bipartisan coalition in both chambers. Iowa Sens. Chuck Grassley, R-IA, and Tom Harkin, D-IA, co-sponsored legislation in March that would give a two-year extension of the wind energy incentive. The PTC gives a 2.2 cent per kilowatt hour reimbursement to companies that distribute and generate renewable energy from sources such as wind. The credit in turn supports manufacturers such as TPI that build the infrastructure to those power companies. TPI officials have stated publicly that a failure to pass the PTC extension could affect more than 35,000 wind energy jobs nationwide. TPI's Newton facility currently employs more than 700 workers. The credit expires on Dec. 31, but  currently is stalled. Wind industry officials have said that production orders for 2013 already have been affected by the inactivity.

In a statement made Wednesday, Grassley criticized the president, accusing him of using the tax-payer funded trip to campaign, although his trip to Newton was designated an official policy visit.

"There's strong bipartisan support in both the House and the Senate for extending the wind energy tax credit," Grassley said. "The president could exert his leadership by working with Congress on a way forward instead of calling for a provision that's a no-brainer for many of us."

But Obama pushed back at Congress Thursday. The president used policy to try to position himself ahead of the gridlock many experts see in the legislative bodies.

"I've been pushing Congress to help us get there by passing a few common-sense policies that would strengthen the economy and put more folks to work right now," Obama said. "We even made a handy 'to do list' that they can check off. It's just like the list Michele gives me. A 'honey do list.' There are only five things on it, but these are all things we could get done before the election. We don't have to wait until then. There some things we should put ahead of politics, and one of them is making sure the economy is moving forward and the recovery is moving forward."

But some political analysts don't see a prompt way forward on the initiatives Obama laid out at TPI. Iowa State University Professor of Political Science David Peterson said that there is little chance the measures will get through Congress before the November elections.

"At the stage we're at now, the Republicans in Congress don't want to give Obama a lot of successes," Peterson said. "And they have a lot on their plate. They have to deal with the budget, tax cuts and the debt ceiling increase."

Peterson explained that even if the proposals are popular ideas, they won't make much progress until the lame duck session. 

With TPI as the venue, Obama's energy policy speech was focused on wind, but the president did call for new tax incentives and an expansion of the 48C Advanced Energy Manufacturing Tax credit, which gives a 30 percent investment credit to manufacturers that invest in equipment to make components for clean energy products. The 48C credit originally was part of the Recovery and Reinvestment Act, more commonly known as the economic stimulus bill. Obama wants the credit to be extended by $5 billion to compensate for more than $5 billion in projects his administration claims it did not receive but merited funding under the original program.

Only a few city blocks away from TPI, the producer of a different type of renewable energy has been waiting for congressional action on a tax credit, which already was allowed to expire in December 2011.

The Renewable Energy Group's (REG) biodiesel production facility in Newton takes animal fats, used cooking oil, inedible corn oil and crude or refined vegetable oil and turns it into a usable fuel that is blended with diesel. Iowa currently is the national leader in renewable fuels, with 13 biodiesel facilities around the state. Industry officials have been calling on Congress to reinstate the Blender's Tax Credit, which gives biodiesel blenders a $1 per pure B100 gallon incentive to refineries who blend the renewable fuel with the existing petroleum-based product. This translates into .05 cents per gallon savings at the pump for consumers.

Monte Shaw, executive director of the non-profit Iowa Renewable Fuels Association (IRFA), was urging the president to extend his message at TPI to include the biodiesel industry. He praised the president for enacting federal renewable fuel standards, which dictate a specific amount of renewable fuel, such as ethanol and biodiesel, be produced nationally each year. But in a letter sent to the White House during the lead-up to Obama's Newton visit, Shaw and the IRFA urged the president to take action on setting the renewable fuel standards for 2013. The president only briefly mentioned biofuels Thursday, including it as a list of alternatives to foreign oil.

The Environmental Protection Agency (EPA) sets the fuel requirements every year, and they have steadily increased in number since the standard was put in place. REG Manager of Corporate Affairs Alicia Clancy said that the 2011 industry requirement was 800 million gallons and in 2012 that increased to 1 billion. The EPA has recommended to the Obama administration a production standard of 1.28 billion gallons in 2013, but the president and the Office of Management and Budget (OMB) so far has remained silent on next year's numbers.   

"He talks about wanting to reduce dependency on foreign oil and increasing renewable fuel usage, but this is something that can be done unilaterally," Shaw said in a phone interview Thursday afternoon. "It doesn't have to go on a 'to-do list' to Congress." 

Just like the wind Production Tax Credit (PTC), Clancy said this hold creates uncertainty in the market for ethanol and biodiesel. Industry officials expect the blender's credit to be reinstated by Congress with an extenders bill after the election, but this would only extend the existing law. Shaw said the IRFA would like to see a 4- to 5-year extension and make the credit more like the PTC, giving the tax incentives to producers instead of the blenders, which often are oil companies that mix the fuels in the refining process.

"Market certainty is affected through federal policy, and the renewable fuel standard is the No. 1 market driver," Clancy said.

One of the president's proposals Thursday involves creating a Veterans Jobs Corps that will help returning servicemen and women from Iraq and Afghanistan find jobs in community service, such as law enforcement and firefighting. After his speech, Obama met World War II veteran and 90-year-old Jasper County resident Archie Hackney at the end of the rope line. Hackney stood up from his wheelchair to greet the president. After speaking briefly, Obama gave Hackney a salute before exiting the finishing bay.

"I'm pretty proud of this," Hackney said as he lifted a gold and blue medal in his hand. "It's his personal medal. I don't have much to say. I'm just glad I got to meet the president." 

Mike Mendenhall can be contacted at (641) 792-3121 ext. 422 or via email at mmendenhall@newtondailynews.com.