The author says that renewable fuels should be given the same opportunity as fossil fuels. Level playing field for renewables

Equal opportunity or a “level playing field” in the free market is one of the greatest cornerstones of American society. It ignites healthy competition between competitors, rewards the best ones and protects the path for others to reach the top. But in the marketplace of energy, that path is blocked when it comes to equal opportunity for investors. Since 1987, only fossil-fuel-based projects — not renewable energy technologies — have been able to leverage low-cost capital through master limited partnerships.

Master limited partnerships are traded like a corporate stock but avoid double taxation because they are taxed as a partnership. Considering that MLPs have consistently garnered over 6 percent in dividends for investors, this is an extremely attractive financial vehicle for financiers looking for a lofty return on investment. And looking at the MLP market right now, the market exceeds $400 billion in capital investments, showing how rewarding this business structure has been for the fossil fuel industry.


Unlike the decades of tax credits and subsidies that the fossil fuel industry has long enjoyed, there is no reason to take away MLPs for fossil fuels. But it is then necessary to extend MLPs to renewable energy to create a level energy playing field and to allow for fair competition in our marketplace. By doing so, Congress would be leveraging its ability to encourage more private investment into our most promising energy technologies, such as renewable energy; a job Congress could pat itself on the back for considering its emphasis on fiscal austerity.

But if Congress chose not to extend MLPs to renewable energy technologies, it would show that Congress wants the incumbents of the private sector, such as oil and natural gas, to remain winners without even really competing. Further, Congress should understand that this policy discussion is not about the production tax credit or the investment tax credit, which remain extremely important to the renewable energy industry. This is about MLPs and how fossil fuels have been able to use them and greatly benefit from them, while renewable energy technologies have not been able to use them or benefit from them for over 25 years. All energy sources have received federal support throughout history including renewables and fossil fuels. But only conventional energy sources have been able to benefit from MLPs, which is unacceptable if we truly believe in protecting and strengthening our free market and an “all-of-the-above energy strategy.”

With the Master Limited Partnerships Parity Act introduced by Sen. Chris Coons (D-Del.), Congress has the opportunity to capitalize on a common-sense proposal that would leverage private investment into renewable energy and begin to level the energy playing field. The bill has strong bipartisan support from a coalition bridging House and Senate and Republicans and Democrats. If Congress can maintain this broad coalition and work on passing this proposal based on the merit of this policy — allowing renewable energy to benefit from a financial mechanism that fossil fuels have benefited from for over two decades — Congress would be taking a mighty step toward bridging equal opportunity for investors.

Renewable energy is a great investment; just ask Warren Buffett, who has invested billions in renewable energy. By allowing renewables to benefit from MLPs and expanding the opportunity for capital to flow into renewable energy projects, renewable energy will greatly benefit and so will the American people. Renewable energy has a threefold bottom line: It creates jobs, strengthens our energy security and protects our environment. Let’s allow investors a fair shot at supporting American jobs, strengthening our energy security and protecting our environment through renewable energy development, all while making some sizable profits. It just makes common sense for the free market to be a clean market and allow energy sources to play by the same rules.

Dennis McGinn, a retired U.S. Navy vice admiral, is president and CEO of the American Council on Renewable Energy.