The US wind energy industry yesterday issued a stark warning that its recent progress will stall and 37,000 jobs could be at risk if Congress fails to extend a tax credit widely regarded as critical to wind farm developers.

The American Wind Energy Association warned that an extension of the federal wind energy production tax credit (PTC) does not appear to have been included in payroll tax legislation currently passing through Congress.

Failure to agree an extension of the tax break would result in its expiration at the end of the year – a scenario that experts claim would have a chilling effect on projects throughout the year.

“The stakes here could not be clearer,” American Wind Energy Association chief executive Denise Bode said in a statement. “Economic studies have shown that Congressional inaction on the PTC will kill 37,000 American jobs, shutter plants and cancel billions of dollars in private investment. Congress needs to understand that, with PTC uncertainty, layoffs have already begun and further job losses and even plant closings will accelerate each month as we near expiration in December.”

She added that the tax credit has significant bi-partisan support, while companies as diverse as Nike, Campbell Soup and Yahoo have all gone on record to call for the tax break to be extended.

“The broad base of support for wind energy positions us well to get the PTC extended at the next possible opportunity,” she said, adding that while it is disappointing the tax breaks have not been included in the controversial payroll tax bill, hope remains that the extension could be agreed later this year.

“The fact that Congress is on the verge of reaching a compromise on such a major piece of legislation bodes well for other legislation,” she said. “While Congress decided not to act on tax credit extenders or any energy provisions as part of the payroll tax bill, we are still committed to finding any opportunity for a first-quarter extension. Our campaign continues.”

In other Congressional news, the long-running row over president Obama’s decision to block the Keystone XL tar sands oil pipeline took another twist after the Republican-controlled House of Representatives passed a bill that will allow Congress to approve the controversial project.

The condition was attached to a highway funding bill, which now also includes measures to expand offshore oil drilling and open areas of the Arctic National Wildlife Refuge to drilling.

The vote steps up pressure on Senate negotiations, where Republicans are also pushing for Keystone XL approval to be tied to the highway funding bill.