“Not In Anyone’s Backyard” – A case analysis of Cape Wind Offshore Energy Project

Introduction First proposed in 2001 as America’s first offshore wind farm, the Cape Wind offshore energy project was projected to provide three quarters of the electrical needs of the Massachusetts Cape and Islands. Yet, only on April 28th 2013 did United States Interior Secretary Ken Salazar announce federal approval of the Cape Wind project. But what was the cause for this delay? The harnessing of wind power is neither a new idea, as the use of windmills began in the 9th century in Iran (Guardian, 2008), nor a particularly new technology, as windmills were first used for the generation of electrical power in Glasgow, Scotland in 1887. In this paper I intend to analyze the various challenges faced by the Cape Wind Energy Project in its 12 year push for approval. On May 9th, 2013, the Earth reached a milestone of sorts. For the first time in an estimated 3 million years, the carbon dioxide (CO2) reached an average daily concentration level of about 400 parts per million (ppm). For some perspective, while CO2 levels have fluctuated from 180ppm to 280ppm, “the last time CO2 levels reached 400 ppm was at least 3 million years ago, a much warmer world where sea levels were 60-80 feet higher” (Levy, 2013). As carbon dioxide is recognized as the primary green house gas emitted through human activities, particularly the burning of fossil fuels, there is little doubt in assigning responsibility for this increase and “a sobering reminder that decades of efforts to bring human-produced emissions under control are faltering” (Gillis, 2013). Though there have been breakthroughs in the scientific calculation of the dangers associated with green house gases since the Cape Wind project was first announced, Yet, if the ever increasing dangers of global warming and climate change are known, in comparison the pace at which alterative technologies have been integrated into our everyday lives has been relatively slow. In 2012, a 70% majority of American consumers was found to support the science behind the explanation of global warming (Leiserowitz, A., et al, 2012), yet it is questionable if they have reached a point at which it willingly purchase the low-carbon energy producing options currently available. While accepting there is in fact a problem may be a step in right direction, the general public must also be prepared to incur the social and financial costs associated with a transition from the cheap and readily available fossil fuels option to green alternative fuels. Additionally, both the State and Federal Governments participation and support is required for this endeavor to succeed. The overriding question, however, is what challenges does a business within the field of alternative energies face when attempting to break into the market and remain a financially viable and sustainable over time? The concept of the Cape Wind project was developed by Energy Management Inc. (EMI), a Massachusetts based Energy Company with long track record of engineering, developing and constructing energy conservation projects and environmentally friendly electric generation facilities. The company has focused its resources in order to develop projects which lower energy costs, reduce pollution emissions, increase energy independence, and create jobs. The Cape Wind energy project calls for 130 wind turbines to be installed off the Horseshoe Shoal in Nantucket Sound, the first of its kind the United States. These wind turbines are projected to produces up to 420 megawatts of renewable energy. Coincidentally, the American Lung Association reported that Cape Cod has the worst air quality in Massachusetts (McCormick, 2012), which the Cape Wind project will improve by reducing air pollution emissions in New England and is estimated to reduce global warming greenhouse gas emissions by 734,000 tons per year. While the project is projected to create up to a thousand jobs in both assembly and ocean construction in the Cape Cod area, 150 additional positions are expected for maintenance and operations.
The Cape Wind Projects Non-Market Issue Rather than strategizing and competing against other wind-farm producing institutions, the Cape Wind project has been postponed and delayed due to issues in its non-market arena. As early as 2002, when a federal judge ruled against an opposition group and allowed Cape Wind to erect a test wind tower in Nantucket Sound, lawsuits were filed to stop the project and have continued for the entirety of the development process. These lawsuits fairly represent the local community interest groups and organizations in the Cape Cod area, and have covered such diverse areas as the potential disruption of whale and bird migrations, interference with airplane and shipping traffic, the wrecking of commercial fishing grounds and the desecration of sacred Native American sites. In addition to the lawsuits filed by various activist organizations, the Cape Wind project has suffered delays due to both State and Federal requirements, in part due to the uniqueness of the project and lack of precedents in the field of offshore wind farms.
Interests and Institutions involved in the issue There are several differing groups of varying interests which have worked to hinder the development of the Cape Wind project. The main non-market issue for the Cape Wind project within the local community has been the enthusiastic local opposition movement known as the Alliance to Protect Nantucket Sound. This alliance was established specifically to contest the Cape Wind project, and was formed in 2001 in response to the Cape Wind proposal as nonprofit environmental organization dedicated to the long-term preservation of Nantucket Sound. The goal of this organization is the preservation of the Nantucket Sound through conservation, environmental action and firm opposition to the industrial and commercial development required for the proposed wind farm. This alliance is composed of many different interest groups within the regions, to include organizations in the fields of tourism, business, environmentalism and Native American Tribes, as well as many local fishing associations. While these groups come from various backgrounds, in general they all support the concept of wind power, split in their opposition to wind power anywhere in the ocean, but yet are all united in their campaign against the Cape Wind project. This public campaign has used television and radio advertisements as well as many guest editorials in the local newspaper, The Cape Cod Times. The Institutions involved in this issue are both the State and Federal governments. All projects that involve near-shore infrastructure, such as the creation of access roads and the installation of power cables from which to draw electricity from the wind farm, are subject to state and local jurisdictions. The extensive list of requirements that had to be met before construction of the project could begin included “a Chapter 91 license from the Department of Environmental Protection; a water quality certification from the state DEP; access permits from the Massachusetts Highway Department for work along state highways; a license from the Executive Office of Transportation for a railway crossing; orders of conditions from the Yarmouth and Barnstable Conservation Commissions; and road opening permits from Yarmouth and Barnstable” (Ebbert, 2007). In addition to the State requirements, the project also fell upon Federal jurisdiction due to the proposed site of the wind turbines were more than three nautical miles from the shore. At the Federal level, the project was subject several agencies, to include the US Army Corps of Engineers, the National Park Service, Advisory Council on Historic Preservation, the Federal Aviation Administration and the U.S. Environmental Protection Agency. Further complicating the process was the passage of the 2005 Energy Bill, which transferred regulatory authority for off-shore projects from the Army Corp to the Department of the Interior.
Information sources used by various interests The Cape Wind project has referred heavily to the pro-environmental aspects of the wind farm, focusing upon the associated clean and renewable energy possibilities with a change from the existing power sources in the Cape Cod area. At peak generation, the turbines will generate 454 megawatts, with an average of 170 MW of electricity, which will account for 75% of the average electricity demand for Cape Cod, Martha's Vineyard, and Nantucket Island. Currently, the Canal Generating Plant in Sandwich generates 45% of the Cape region's electricity through the process burning bunker oil and natural gas. Once the wind farm is fully operational, it is estimated to offset nearly a million tons of carbon dioxide every year and should produce enough electricity to offset the consumption of 113 million US gallons of oil annually (Kimmell, et al, 2011). Additionally, the project will create many manufacturing positions in the short term and over 150 long term jobs to the area. For interest groups in the area, to include the Alliance to Protect Nantucket Sound, one focus is upon the environmental and negative aesthetical impact of the wind farm. They believe any offshore energy project would present a litany of potentially negative impacts on the coastal resource areas, including the shoreline, the sea itself, and the seabed, and on economically important species that depend on these habitats. As a natural habitat to many different federally protected species of wildlife, they believe the Cape Wind project has potential to violate federal law, to include the Endangered Species Act, the Fisheries Conservation and Management Act (FCMA), the Marine Mammal Protection Act (MMPA) and the Migratory Bird Treaty Act (MBTA). In addition to the environmental concerns, the wind farm is opposed due to its affect upon the landscape of Nantucket Sound. Each wind will would stand nearly 50% taller than the statue of liberty, causing, in their estimation, an eyesore on the region. But perhaps the greatest cause for apprehension is the tax implications. The Cape Wind project was awarded a $350 million Department of Energy (DOE) loan guarantee and a 30 percent federal tax credit (Sandoval, 2013) while costing $2 billion to $3 billion more to produce than onshore wind. “This same amount could be used to generate more energy and jobs at lower costs if spent on onshore generation” (Kennedy II, 2010).
Cape Wind Company Strategies There is a consistent strategic pattern on the part of the Cape Wind project in working with the State and Federal regulatory bodies to ensure they meet all requirements in moving forward. Much time has been spent securing the necessary political capital outside of the Nantucket Sound area, though it does not appear that much consideration was given to the resistance the project would receive from the local interest groups before the project began. Much of the propaganda is geared towards the positive benefits created for the state of Massachusetts and the United States as a whole, while marginalizing the concerns of the local populace.
Cape Wind Strategy Options Now that the Cape Wind project has met all state and federal requirements, their strategy options will be focused upon continued litigation from the local interest groups in the Nantucket Sound area. A failure to understand the agenda, preferences and capabilities of the Alliance to Protect Nantucket Sound was a severe miscalculation that has proven to be quite costly and time consuming. Though the project has received approval as of April 2013, there are still several lawsuits pending which will further delay construction. Though the project has engaged in a campaign of advocacy science to detail the benefits of the wind farm, a specific strategy for the addressing the continued social pressure is needed as well. Additionally, the role of the wealthy inhabitants of Cape Cod illustrates how “private politics can shape the non-market environment” (Baron, 2013). One resident, billionaire businessman Bill Koch, has financed a strategy to “tie up the courts while trying to elect anti-wind power politicians” (Mohl, 2013). The next strategic move by the Cape Wind project must address these interest groups to minimize potential issues moving forward.
Recommendations
The Cape Wind project will need to address the public relations issues and political pressure applied by the interest groups in the Nantucket Sound area. Now that the project is fully approved, Cape Wind should encourage cooperation with the Alliance to Protect Nantucket Sound. One company, Hy-Line Cruises, a “longtime opponent of the proposed Nantucket Sound wind farm, is joining forces with Cape Wind in a Hyannis-based ecotourism business” (Cassidy, 2011). Using this example, there are social and financial benefits external to the environmental and electrical gains from the wind farm that must be examined. Cape Wind will need to involve the local interest groups to exhaust all possible options and opportunities available. Another topic of concern that will need to be addressed is the raise in taxes incurred by the consumer. If the residents of the area are disproportionately affected by the construction and operation of the wind farm, this should be negated through lobbying for discounts on both taxes and electrical costs. If through coordination with the local businesses there are opportunities found which provide positive exposure for the Cape Wind project, such as the eco-tourism example noted above, there should be exemptions made available to these groups as well. Regardless of its ability to impact the state and federal tax code, any push in this direction will reflect well upon the company’s reputation among opponents.
References:
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Phadke, Roopali. "Steel forests or smoke stacks: the politics of visualisation in the Cape Wind controversy." Environmental Politics 19.1 (2010): 1-20.

Kimmell, Kenneth, and Dawn Stolfi Stalenhoef. "Cape Wind Offshore Wind Energy Project: A Case Study of the Difficult Transition to Renewable Energy, The." Golden Gate U. Envtl. LJ 5 (2011): 197.

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