Former State Economic Chief: Congress Should Save Clean Energy Tax Credits

The end of tax credits for clean energy projects, as proposed in legislation moving through Congress, risks hundreds of millions of dollars of investment and jobs in West Virginia. 

Curtis Tate spoke with former Economic Development Secretary Mitch Carmichael, who supports preserving the tax credits.

This interview has been edited for length and clarity.

Tate: What’s at stake in West Virginia? What does the state stand to lose?

Carmichael: Well, I could just tell you, from West Virginia’s perspective, there are many projects that have been oriented towards these tax credits. You think of Form Energy. You think of the Fidelis project in Mason County that was set up for carbon capture and sequestration. The Nucor project, writ large, is about producing green steel, ultimately low carbon steel. The Berkshire Hathaway project. Those are just projects that I know for a fact, having worked in economic development and devoted my career to helping jobs and growth and opportunity in the Mountain State, that in this region, because I’ve worked on a lot of economic development projects in this region, not just West Virginia. There are many projects that are seeking these energy tax credits. 

Tate: How does preserving the tax credits align with the president’s agenda?

Carmichael: This is really the quintessential American response to create an energy dominant economy that provides great jobs, future-oriented manufacturing, reshoring manufacturing. It’s so much different than what would traditionally be considered a grant or a handout to businesses. These are actual rewards for doing jobs, for creating the opportunities in America and keeping down the cost of energy and helping transition. It’s not about climate ideology or anything like that. It’s about transitioning to a more America-first, manufacturing-dominant economy that provides low-cost energy. So why would anyone want to take away energy tax credits? We’re already experiencing too much inflation in terms of our energy and power costs. Just look at your residential power bill.

Tate: Do the tax credits help create microgrids that can support AI and data centers?

Carmichael: I’m very familiar with the way microgrids work, because of the Jackson County Berkshire Hathaway designation as a microgrid and the creation of that titanium plant that’s going to be the world’s most advanced titanium manufacturing plant, with over 200 to 250 great jobs. So the way this works is an area will be designated as the microgrid that can then power with any number of energy sources. It can be geothermal, hydrogen, biomass. It can be traditional coal, oil, natural gas, that can all be then carbon sequestered. So that works in conjunction with manufacturing entities or data centers to have these areas that they can quickly get power at a reasonable price, and provide the jobs and new growth.

Tate: How do they help maintain a supply of critical minerals?

Carmichael: These tax credits are not just about energy, per se, they’re also about rare earth elements. So these tax credits can be utilized to create incentives for going out and mining these rare earth elements, these critical minerals that are involved and utilized in everything from medicine to fighter jets that are often imported from countries that are adversaries to America, and they can potentially weaponize those minerals against our energy dominance and our manufacturing and our economy. So we need to maintain these tax credits in order to assert American dominance in terms of our energy manufacturing base and secure our supply of natural critical minerals.

Tate: The credits are geared toward coal and power plant communities, right?

Carmichael: West Virginia is the only state in America that is completely within the Appalachian Regional Commission designation. So all 55 of our counties will qualify for these tax credits. And it’s so beneficial as an economic development to go out and tout these tax credits for businesses to locate in our state. We’ve seen the results, as I alluded to earlier.There are many, many more, but Berkshire Hathaway, one of the world’s largest entities, decided to put a solar field in Jackson County and build a new factory powered completely by solar energy. And then we have the Form Energy project in the Weirton-Follansbee area that has 750 manufacturing jobs. And for those who think, “OK, this is about the demise of the traditional fossil fuel industry.” That’s not the case at all.

Tate: Did you say the credits can support fossil fuels as well?

Carmichael: Yeah, because of the tax credits that can be associated with technology, for instance, like carbon capture and sequestration. I know there’s a lot of discussion and conversations about the viability of that technology, but there were lots of tax credits associated with that undertaking. Those who are in the fossil fuel industry see that as a great avenue to extend the life of those industries and green and clean them up to the extent that they qualify for all these tax credits. It absolutely will increase the cost of energy production if these tax credits go, bottom line.