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United States

Precedent setting battle off Cape Cod

Wind turbines are going offshore in Europe by popular request, but projects proposed for waters off the coast of New England have given rise to a storm of well orchestrated protest among the region's wealthy residents, including some of America's most powerful politicians. But in attempting to use their privileged status to undermine due democratic process, they might well end up causing a popular pro-wind backlash against elitist shortsightedness

Jim Gordon, a compact and intense man, leans far over his lunch plate and knits his eyebrows to make his point. "We never, never in our wildest dreams..." he drifts off, thinking and trying to choose his words, "never imagined ...."

About nine months ago Gordon's company, Cape Wind Associates, proposed a 420 megawatt wind farm for just south of Hyannisport and Cape Cod's south shore, summer destination of many wealthy families like the Mellons, the Heinz's, and -- in particular -- the Kennedys. Bitter opposition followed Gordon's announcement; and a shadowy but very well financed group called the "Alliance to Protect Nantucket Sound" materialised, intent on preventing the project ever seeing the light of day.

Initially, the group tried to position itself as "pro-environment." Since then, however, the respected state and national environmental groups have gone on record as saying that they support the project if studies show it to be environmentally sound. Only a few marginal groups with fund raising roots in animal rights' campaigns have gone on record in opposition. Even the well-respected Conservation Law Foundation, which has fought legally to protect the ocean from exploitation for decades, gave the wind station its thumbs-up. The Alliance recognised the greenwashing jig was up.

The organisation then turned to a strategy of combining legal manoeuvres with back-room politics, attempting to block the environmental research required of the project before it could proceed. At a recent fund raising meeting, Alliance representatives told yachtsmen that the group plans on spending millions of dollars in legal fees, if necessary. Consequently, observers have become increasingly worried that the group's actions could endanger the success of all offshore projects in the United States -- and by now there are a whole series under consideration for the northeast Atlantic continental shelf.

Backroom politics

Frustrated federal officials responsible for permitting the project complain of having experienced backroom political muscle. The US Army Corps of Engineers (USACE), normally closed-mouthed in these debates, became angry enough to speak out. "This is truly heartbreaking that some individuals will not make themselves part of this public process, where we cannot together confront this as an open and fair process to reconcile an divergent points of view and find the right solution," says Larry Rosenberg, speaking for the Boston office of USACE. Rosenberg's statement speaks volumes about what has been going on behind the scenes.

Gordon, the man at the heart of the controversy, has a bit of a boxer's style to him. Some other wind developers say privately that Gordon did not approach the community with enough public education at the beginning, a criticism that may be fair to some degree. On the other hand, the issue was made public by the vocal minority in a community meeting long before Gordon was ready to announce his plans. Gordon's company, Cape Wind Associates, was not even notified of a few of these initial gatherings.

With a short military haircut, a more-than-firm demeanour and a sharp voice that grates on some people, he is the classic American entrepreneur. With more than a quarter of a century in energy entrepreneurship, mostly building relatively small gas turbine projects, Gordon believes the region is built out when it comes to conventional fossil fuel plants. He is certain that the Northeast's next energy wave will be wind. And he is convinced that his economic future -- and the economic future of the Northeast as a whole -- lies in wind power.

Unimaginable

What he did not imagine, when he first proposed the project, was the intensity of the deep-pocketed, deeply entrenched political power that would be levelled against him. In particular, he did not expect The Full Monty to emanate from the powerful Kennedy clan, influential on Cape Cod ever since the days when Jack, Bobby and the rest of that generation sailed the waters Gordon wants now to develop. Across the nation, Kennedy power may be very much on the wane as the younger generation finds itself frequently beset by legal and criminal allegations, but on Cape Cod, the Kennedys remain "The Last Word" with a large group of party faithful.

According to current scuttlebutt, family head Ted Kennedy has decided there will be no wind farm built in Nantucket Sound. Proof that this is more than just gossip is bountiful and boldly public. While the senator has not appeared personally at public meetings, his aides have been seen frequently, taking notes on what is said and who has said it, simply letting their presence be known. John O'Brien, a board member of the opposition group, claims to meet regularly with Graham Shalgian, a Kennedy aide in the Boston office, to discuss strategy. "Senator Kennedy agrees with us," O'Brien said at a recent public meeting.

The concentration of all this political muscle is beginning to backfire, however, with USACE, the national government's main permitting agency, showing clear signs of irritation. Just as it was about to issue a permit for construction of a temporary wind monitoring tower, the agency head received a warning about issuing a positive decision from Virginia Senator John Warner. Kennedy told the local paper that he approved of Warner's last minute intervention, calling it "process." Yet Army Corps officials say that other such temporary towers have been approved as a matter of routine, without even a public hearing. "This is literally just three sticks in the mud," was the comment of an exasperated Rosenberg.

Despite all the harassment, the data tower was approved last month, though the permit sparked further abuse from the alliance which fears it sets a "dangerous precedent" that "could lead to the destruction of Nantucket Sound." According to the alliance's Isaac Rosen: "We don't even have the slightest process in place to assess whether this project makes environmental or economic sense."

Backdoor methods

Many of the state's Washington-oriented Democrats are following Kennedy's lead. Former Clinton administration official Robert Reich, now in the running for Massachusetts governor, has publicly said the project's aesthetics make it unsuitable for that particular location. Federal government officials involved in the permitting of offshore projects privately say they have been informed, via back-door methods, that the Massachusetts delegation, led by Kennedy with Democratic Senator John Kerry and Democratic House of Representatives member William Delahunt in tow, would not be pleased to have this project permitted.

"I think a very fair question is whether Horseshoe Shoal is the appropriate location," Kerry was quoted as saying in the local newspaper in May. Kerry has declined since then to take a public stand, possibly because his presidential hopes are based in part on environmental credentials. Many observers have come to the conclusion that the divide here is not political, but is instead populist-versus-elitist. "That's beautiful-people land down there," said one government official about the wealthy towns financing the legal delaying tactics.

Several months ago, Kennedy submitted legislation calling for a two year study of offshore wind by the National Academy of Science. The proposal is a rider to the energy bill currently under debate in the US Congress. Although it does not expressly forbid offshore action in the interim, if passed the effect would likely be a moratorium on projects of any major importance. Currently the legislation is locked in committee and is likely to remain there through the end of the year. According to a press aide, Kennedy has no plans "at this time" to re-submit it if nothing happens this fall. The aide, pointedly, does not deny statements that Kennedy is supporting the Alliance efforts, saying only "many people think they know" where Kennedy stands.

This mysterious response may be due to the national press, which has begun to take note, particularly because Kerry and Kennedy have spearheaded opposition to oil exploration in the Alaskan national wildlife refuge and have constantly chided the Bush Administration for its refusal to cope with the global warming crisis. Stories about the Cape Wind project have run in the New York Times, Newsday, the Los Angeles Times and The Washington Post.

Editorial support

Derisive editorials have been written about the project's opponents. "Democrats are champions of wind power except when it's blowing in their own back yard," wrote columnist John McCaslin of the right-wing Washington Times. "If communities want energy, they have to stop rejecting the sources," chimed in USA Today, a weekday national wire-service-style newspaper. "Take power from the wind," encouraged the Boston Herald and the Providence Journal. If environmental and financial studies are positive, "the project deserves a green light," says the Boston Globe.

Despite this enthusiastic journalistic support (barring from the local Cape Cod Times that is), Gordon's tribulations with his project have severely dampened industry enthusiasm for offshore wind development in America. Plenty of companies say they are interested in this potentially lucrative area, but few want publicly to tangle with such a well-financed special interest group backed by politically powerful senators. Asked if his company is interested in offshore wind in the United States, ABB's American executive Bill Snyder replies: "Your question assumes there is an offshore wind market."

Wildcatters

Still, in the tradition of American energy wildcatters, there are some hopefuls willing to try. Early last month, two New York men made New England headlines when they met with Army Corps officials to discuss projects on four separate sites off the south east coast of Nantucket, a very wealthy island where Senator Kerry owns an expensive second home. The wannabe company (it has never built a generating facility of any type) has some pretty big dreams. Ultimately, the company hopes to build in the area roughly 800 MW, the size of a significant coal fired plant. Today the entire US has a toal of 4250 MW of wind power.

The company, Winergy LLC, is based in Shirley, New York, a village towards the eastern end of Long Island. So far, Winergy is a two man company. Robert Link is a former fish salesman and Dennis Quaranta a past manager in a mid-level restaurant chain. Link is a man of boundless glee who appears to be enjoying his sudden notoriety. When the local Cape Cod Times called him a "squatter," he laughed heartily. "You can call me anything you want," he said, "Just don't call me late for dinner."

Link believes his expertise lies in the acquisition of ocean permits. Having gone through a lengthy review process in order to operate an open-ocean aquaculture farm, he says he is more familiar with the maze of federal and state organisations which must sign off on saltwater activities.

In fact, Link claims that because of his experience Winergy will be the first company to operate an offshore wind farm in the United States. That may, possibly, come to pass. Winergy has filed a partial application with USACE in New York to build a four to 12 turbine "test" project off the coast of New York State's Plum Island, where Link operates a fish farm. Plum Island is a federal research facility with a large number of study animals -- a constituency unlikely to find wind turbines offensive. "It's not a race," chuckles Link, "I couldn't care less if I'm first, second or third. But I'm going to get mine done. And I will be first."

Moreover, should Winergy succeed in acquiring permits to operate the small project, ABB may become involved. Snyder says his company has been in talks with Link and Quaranta, and has performed some engineering services for them. He is watching with considerable interest. "It's fair to characterise that ABB has an option to work with Winergy on the Plum Island site. That's really all it is at this point." The big question, repeats Snyder, is whether any company will succeed in safely navigating the current political hazards. "Permitting is certainly one of the major issues," he continues, "if not the primary issue. If you don't get permits, it doesn't go anywhere. That's what we're evaluating now."

A third and fourth

Also in the current running are two more potentially viable projects. Virginia-based Atlantic Renewable Energy Corporation has just received a $300,000 grant from the state of New Jersey to begin studying the feasibility of a project to be built near Barnegat Inlet, off the New Jersey coast. As with many other East Coast states, New Jersey recently revamped its energy regulations. In the process, a small amount of state money was set aside to encourage the development of renewable energy generation.

Atlantic vice-president Sam Enfield says the company would use the money to study site control issues, engineering issues and environmental issues. The company has developed several small wind projects on land in New York and New Jersey and is involved in a 240 MW wind-gas proposal in Iowa. Enfield says Atlantic Renewable's interest in offshore development remains uncertain at this point, in part because of the chaos on Cape Cod and the unclear political situation. Legislation like that proposed by Kennedy "might slow down development and drive up the cost of wind power," he says.

In New York State, the Long Island Power Authority (LIPA), a governmental agency that distributes power, hopes to provide a guiding hand for a 100 MW project off the south shore of the island. LIPA, which buys and distributes power to about one million residential and about 100,000 commercial customers, has tried to develop land-based wind projects. Local opposition, however, defeated those attempts. The agency then concluded that "in terms of making wind a meaningful percentage of our possible energy mix for the future, we're going to need to go offshore," says LIPA's Dan Zaweski.

Zaweski's job is to implement green power opportunities in the Long Island system. As a sponsoring governmental agency, he says, LIPA will seek wind developers interested in working with the government to implement the project. In addition, LIPA will provide funds for both the underwater cables and interconnections, a contribution that could amount to as much as $150 million. In addition, Zaweski continues, LIPA will negotiate a long term contract to buy the power.

The agency has already begun to work with local environmental organisations, citizens groups and other interested stakeholders, in order to avoid the kind of situation that occurred on Cape Cod. This fall, the agency will issue a "request for information" from interested developers -- basically an opportunity for developers to explain their points of view on project details and locations. Later in the year LIPA expects to issue a request for proposals.

LIPA's attempts to kick-start the offshore industry are government sponsored, and for that reason have great potential. Zaweski cautions, however, that it may be at least five years before this initial project actually produces energy for the Long Island grid. If it is successful, offshore wind "could become a very meaningful proportion of the overall energy mix...We've taken what I'll say is a different track in our approach, compared to the Cape Cod project," he says. The group does seem to have worked hard to develop neighbourhood goodwill. Meetings have already been held with environmental groups, fishing groups and others in order to explain the benefits of offshore development. We have "an understanding and a desire to go forward with this with many of the environmental groups on the island," Zaweski explains.

Lawyers wade in

All this good will, however, may be for naught if the political and legal efforts to delay off-shore wind are successful. In July, alliance chief Doug Yearly, retired head of the mammoth Phelps Dodge mining company, vowed a lengthy legal battle if the Army Corps approves the wind farm. Yearly said he needed at least $600,00 to kick off the campaign, saying he had hired law firms in both Boston and Washington DC.

Later in July, a lawyer representing the alliance from the Boston-based firm Nutter, McClennen & Fish told the US Commission on Ocean Policy that "there should be a moratorium on new types of development of the outer continental shelf until adequate planning and studies occur." The "gaps in regulatory policy" need to be filled, the attorney added. He then suggested that the commission recommend "that federal agencies responsible for regulating the outer continental shelf defer decisions concerning [its] use." The ocean commission is a fact finding body which will eventually issue a report to Washington.

How to proceed

For its part, USACE denies the alleged "gaps" exist. "How do we go forward from here?" wonders the Corp's Larry Rosenberg. "Here is an opportunity to go forward with this non-polluting energy and we can't even form consensus with this very tiny group of individuals, because it's in their own back yard. The Corps' point of view is pretty pragmatic. The Corps' authority under Section 10 of the Rivers and Harbors Act and 404 of the Clean Water Act is certainly over and above what's needed for the regulatory and permitting process. I can't speak to the other issues involved -- leasing and minerals management. Maybe indeed that is necessary, but that's really up to the Congress of the United States. But with regard to the permitting activity, as charged by Congress, the regulatory oversight is more than adequate."

Rosenberg was referring to several proposals being debated in Washington, particularly a proposal by the Bush Administration to give siting discretion to the US Secretary of the Interior. That proposal would also allow the government to charge leasing fees from wind developers. The measure would, in some respects, simplify the siting question for offshore wind entrepreneurs, but it is sure to encounter severe opposition from the nation's major environmental groups, because it could also open the door to easier access to the oceans for oil and gas interests.

David L O'Connor, head of the Massachusetts' state Division of Energy Resources, says the issue of "gaps" in the regulatory process is a red herring. O'Connor believes that a long history of precedent exists to permit offshore wind and that nothing more is needed. Nor, he says, should wind entrepreneurs be charged lease fees. He disputes that wind projects fit into the same category as oil and gas drilling projects. "These facilities are subject to the same scrutiny as someone would be for the construction of a wharf or of a dock or other facilities that use the bottom to anchor themselves. They're not charged for the use of that bottom. The environmental impacts are looked at, but after that, there's no suggestion that somehow those facilities should be paying extraction rights. My own take is that we have a sufficient regulatory oversight as it now stands."

Grey area

Nevertheless, a growing consensus of government officials and environmental groups say this "grey area" needs to be cleared up in the long run. Currently, most use of the oceans in the United States is governed by a "first come, first served" practice, a situation that has created a horizon filled with wind turbines in some imaginations.

Occurring against a backdrop of national concern about the health of the nation's oceans in general, many people are beginning to ask for more planning for their use, including use for offshore development. Massachusetts environmental secretary Bob Durand has called for a comprehensive federal authority that would plan and co-ordinate a wide range of ocean activities, wind farms included. "Despite the seemingly excessive regulatory maze, there is no primary agency at the federal level to provide leadership and planning" in the nation's oceans, Durand comments.

Profound urgency

Greg Watson, a Massachusetts state official charged with helping develop green energy alternatives in the state, says it is unclear, at the moment, whether the push for planning can occur "on a parallel track" with the various offshore wind proposals. Watson has temporarily set up offices in Hyannis in order to try to help mediate the current dispute, saying that many people realise that the precedent set on Cape Cod could affect the long term future of wind development in the United States.

Conservation Law's Stephen Burrington says his organisation believes there is a profound urgency, so much so that projects should not be asked to wait for a lengthy planning process. "Our position is that the existing regulatory framework isn't perfect, but that it's good enough for the meantime, given the need to avoid delay in reducing greenhouse gas emissions....The critical thing for everyone here is to recognise that we need to strike a balance. We need to protect the ocean, but that means both from construction of unnecessary facilities and from the effects of climate change."

Burrington hopes that potential wind developers will not be deterred by the Massachusetts fuss. "The people with the alliance clearly have a lot of money and a few are highly motivated, but there are a lot of other people out in the environmental community who really want to figure out what the right thing is. In the end, most of them will come out in favour of responsible wind development offshore. Once we get past this, once poor Jim Gordon has taken his lumps and we start to get some turbines up there and producing power and enabling people to see what they look like, you're going to see a lot of enthusiasm developing around the region."

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