Foreign Policy Watch

Geopolitical musings through a progressive lens …by Matt Eckel and Jeb Koogler

The Politics of American Wind

Note: This is a guest post from Martin D. Quiñones. Martin holds a B.A. from Brown University and is pursuing his J.D. at U.C. Berkeley School of Law.

It’s been a tough few months for American offshore wind power. Cape Wind, the project to build 130 massive turbines in the Massachusetts’s Nantucket Sound—and the most developed plan to date— had its FAA approval overturned by in the D.C. Circuit. And despite receiving site approval from the Department of the Interior and securing a fifteen-year power purchase contract with National Grid, Cape Wind has failed to secure the Department of Energy loan guarantees it hoped would subsidize a large part of its $2.6 billion price tag, something it’s not now likely to do in the wake of the Solyndra debacle. NIMBYs and nervous local governments have also recently scuttled or significantly delayed prospective projects in the Great Lakes off Michigan and New York. Environmental impact studies are getting under way for promising Gulf developments in Texas, among many in the region, but those projects remain years away. But even with all this sour news, the U.S. needs to get serious about offshore wind, both as economic and environmental policy, and needs a coordinated national strategy to do it. Although the issue gets surprisingly little press, consider this brief rundown of the status quo and the potential future:

The World Wind Energy Association reports that China added 19gw of new wind generation in 2010, nearly doubling its total wind capacity and surpassing the U.S. as the world’s wind energy leader. The U.S., by comparison, added only 5.6gw, down sharply from 9.9gw in 2009. Denmark now receives 21% of its total power needs from wind sources, with Spain and Portugal not far behind. If the U.S. doesn’t make a real effort, we risk continuing to surfeit ourselves on fossil fuels precisely as other countries reduce their dependence, not to mention losing an opportunity to create thousands of high-quality blue-collar jobs. So what can be done to reverse America’s slowing pace for new wind development, and offshore wind in particular? It turns out 24 Governors got together and thought about it.

In July, the Governors’ Wind Energy Coalition—which surprisingly does not include Rick Perry, who has strongly supported wind power in his own state—sent a letter to President Obama outlining some steps the federal government should take to support wind energy initiatives. The three most important are as follows: (1) extend the production tax credit and investment tax credit for renewable energy set to expire in 2012, (2) improve collaboration between airspace, radar, and wildlife agencies to streamline the siting process for offshore farms, and (3) expedite Department of the Interior leasing processes for new projects, with a goal of cutting in half the current 7-10 year approval time. Notably absent from their proposals were more aggressive strategies like the feed-in tariffs (basically mandated minimum rates utilities must pay for power provided to the grid by small renewable sources) championed in Germany, Spain, and California.

What’s interesting about these three proposals is that they might have legs, even in today’s, shall we say, volatile Congress. A bipartisan bill introduced this month to extend the production tax credit through 2016 is now before the House Ways and Means Committee, this time with the support of 23 members of the Governors’ Wind Energy Coalition. One imagines at least in theory that legislators and (and Presidential candidates) in thrall to Grover Norquist would not turn up their nose at extending a business tax incentive that promises blue-collar jobs, and that liberals would continue to lend support for greener reasons. The siting and leasing issues are trickier, since the Coalition’s proposals are essentially deregulatory measures. On the one hand Obama might think twice about giving corporations (even clean energy ones) easier access to public lands and waterways lest he alienate the left, while on the other the Republican House might balk at deregulation that omits greater oil and gas exploration. The calculus is complex and the terrain uncertain.

Ultimately, as with so many of today’s biggest policy questions, November 2012 will likely decide the fate of offshore wind, or at least the fate of any serious federal support for it. Political chaos between now and then could sideline extending the production tax credit and muddle any favorable regulatory changes. But the outlook is not as bleak as one might expect. A Republican President could allow offshore wind to benefit from his or her benevolent assault on the tax code and regulation. A reenergized Obama could find enough gall—and enough support—to take at least the more popular measures forward. In short, there is enough room for the industry to hedge, and come out with something positive. And it’s in America’s best interest that they do.

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  1. Cape Wind economics are so bad the government refused to force the public to guarantee a loan developers needed to attract investors. Patterson Associates calculated a $4 Billion “Green Energy Tax” to consumers over the 15 year Cape Wind NGrid PPA term.

    How often do we see this level of fiscal sobriety exhibited by federal government?

    Cape Wind is cursed by its incompatibility as an industrial project proposed too close to shipping lanes, too near flight paths. It encroaches in NE finest fishing and spawing and shellfish grounds. Cape Wind poses a threat to Nantucket Sound’s endangered mammals and birds, NHL’s, Tribal Cultural Property and the Cape and the islands’ beaches.

    The extension of the PTC is unwise as the government rarely picks actual winners.