BUSINESS
02/23/2013 10:41 am ET | Updated Mar 01, 2013

Cape Wind: Regulation, Litigation And The Struggle To Develop Offshore Wind Power In The U.S.

In 2001, Jim Gordon, a well-heeled developer of natural gas plants in New England, took up a long-discussed but never-pursued idea that advocates said would usher in a new era of clean energy in America: an ocean-based wind farm off the shores of Cape Cod.

The advantages of the site seemed plain: Relentless, hard-driving winds, shallow shoals several miles offshore on which to anchor large turbines, and, perhaps most importantly, a left-leaning population inclined to support what was already viewed at the time as an overdue migration away from dirtier sources of electricity.

"We have real and looming environmental problems on the horizon," Gordon told reporters that summer, as he prepared to apply for the necessary federal and state permits. "Is this going to solve these problems? No. But it is going to help."

Almost 12 years later, the now 59-year-old Gordon, who graduated from Boston University during the 1970s oil crises with a degree in communications and, he says, vague designs on film school before he set his sights on the energy business, is still pressing his case. Not a single turbine is in the water.

Acquiring the full array of government permits and sign-offs -- a byzantine process involving dozens of sometimes overlapping, often contradictory agencies, hundreds of officials and thousands of pages of impact statements -- took over a decade. And more than a dozen lawsuits, citing everything from potential disruption of whale and bird migrations to interference with airplane and shipping traffic, the wrecking of commercial fishing grounds and the desecration of sacred Native American sites, have thrown sand in the project's gears at every turn.

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"I can't think of anything more benign" than an offshore wind farm, says Jim Gordon, President of Energy Management, Inc., which is behind the Cape Wind project. (AP Photo/Rebirth Productions)

Virtually all of the opposition suits over the years have been rejected ultimately by the courts, but at least four more are still pending, and opponents promise to keep fighting.

To be sure, as the first proposed offshore wind project in the United States, Cape Wind, as it is called, was bound to encounter unique scrutiny, and like any undertaking of its size, it is not without environmental impacts. But the long-thwarted wind farm also highlights what some critics say has become a bloated and overly complicated regulatory maze through which fewer and fewer project developers of any kind have the wherewithal to navigate.

Indeed, while it has earned the backing of virtually every major environmental group -- including the Sierra Club, the Natural Resources Defense Council, Greenpeace and others -- the government's unhurried review of the project cost tens of millions of dollars more than it would have in countries with more streamlined permitting processes. And even now, Cape Wind remains stuck in a briar patch of legal challenges to its siting, mostly filed by a small but determined coalition of local residents and unusually wealthy property owners in the area who have no incentive to relent.

It is a dilemma that developers of major infrastructure projects know all too well, and one that some critics say is in dire need of reform. "There has to be a better way," said Matthew Brown, an attorney with Common Good, a nonpartisan group seeking ways to overhaul governmental and legal systems to streamline the approval or rejection of major projects of all kinds. "It shows just exactly how far away from the purposes of the process the actual reality has come," Brown said, "because environmental review, and the lawsuits attending it, now actively thwart environmentally positive projects like Cape Wind."

During his State of the Union address last week, President Barack Obama declared that, "for the sake of our children and our future, we must do more to combat climate change," and he promised to "speed the transition to more sustainable sources of energy." But just what an idealized project-permitting system might look like -- for clean energy or any major infrastructure project -- remains a matter of debate. Environmental and citizen groups are understandably loath to limit access to the courts, or to overhaul a regulatory machinery that, for all of its messiness, affords them a good deal of leverage against deep-pocketed developers of far more menacing projects than Cape Wind.

And while the Nantucket wind farm appears to be nearing the end of its own legal and regulatory limbo, it still remains too soon to say with any certainty when -- or even if -- the project will be built.

This, critics say, needs to change.

"I can't think of anything more benign in terms of impact than an offshore wind farm, compared to our other energy choices," said Gordon, who estimates that he has spent at least $65 million working through the regulatory hurdles and fighting lawsuits. "I think that within a certain time frame, maybe having a one-stop agency where the cooperating agencies kind of put in their concern, and the public goes before it and -- we should absolutely have public hearings. We have had an extraordinary amount of public hearings on this project. And written comments. That shouldn't stop. All I'm saying is that there needs to be a reasonable time frame for an up or down decision.

Twelve years and counting, Gordon added, is simply too long for any project to sit on the drawing board while regulators and on-the-ground stakeholders squabble over details. "Most projects and most developers that would get involved in a process like that would probably throw up their arms and walk away," he said. "And for some worthy projects, that would be a shame."

KICKSTARTING AN INDUSTRY

On a blustery, early winter day, with a cold, driving rain pelting the windshield, Cape Wind's longtime spokesman, Mark Rodgers, eases his car into an empty parking lot at Cape Cod's Craigville Beach in Centerville, Mass. The hamlet is about 3 miles southwest of Hyannis and located midway along the tricep of the cape, a long, narrow peninsula that stretches out into the Atlantic and then curls up and back, like the flexed arm of a swaggering bodybuilder.

Rodgers takes a spot facing due south, into the great emptiness of Nantucket Sound.

"We knew from the beginning we had to pass two critical tests," Rodgers said. "We had to permit the project, and we had to finance the project. And when you're financing a project, novelty is bad. And we knew, by being America's first offshore wind farm, that we were going to be novel. So we wanted to make everything we could about the details of the project to be as un-novel as possible. We wanted the most optimal engineering site characteristics we could find."

The project's corporate developer, Jim Gordon's Energy Management Inc., which had been building natural gas power plants for nearly 20 years prior to taking interest in an offshore wind project, found in Nantucket Sound what it considered to be the most advantageous offshore spot anywhere from Maine to New Jersey: Horseshoe Shoal.

View Cape Wind in a larger map

The shoal itself was sandy and shallow -- generally less than 45 feet deep -- which makes anchoring the turbines to the seabed easier, and the entirety of the 25 square mile project area, surrounded by the cape to the north, the islands of Martha's Vineyard to the west, and Nantucket Island to the east, would be protected from the often punishing, 50-foot swells of a stormy North Atlantic sea.

Sending the power generated by the giant turbines back to shore would be a relatively simple affair via undersea cables, and unlike the multiplying land-based turbines in the windy midsection of the country from West Texas to Nebraska and the Dakotas, Cape Wind would be comparatively close to the power-hungry metropolitan areas of the Northeast -- another advantage, supporters noted. All of the turbines would also be at least 5 miles away from coastal properties -- a sufficient distance, the developers had hoped, to avoid undue imposition on residents and summertime vacationers.

The 130 turbines, each standing 258 feet tall from water to hub and with anywhere from six to nine football fields of open water between them, would be as close to Craigville Beach as nearly anywhere, and their massive fiberglass blades would reach 440 feet above sea level -- well higher than the tip of the Statue of Liberty's torch -- at their highest rotation.

On a clear day, they would be unmistakably visible from this parking lot: A row of thin hash marks along the horizon, according to photographic simulations produced by Cape Wind.

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A simulated view of what the windfarm would look like from the Craigville Beach area, according to Cape Wind's developers.

Collectively, the spinning turbines would have a nominal capacity of 468 megawatts, but this is an idealized energy-industry metric representing the site's output if the winds blew strong and steady at all times, and all turbines were spinning continually at maximum capacity. In the real world, of course, that never happens, and the average power output would likely be somewhere between 30 percent and 40 percent of that maximum capacity. Critics hew to the lower end of the range, supporters the higher, but Cape Wind estimates that the average output of the facility would represent about 75 percent of the typical electricity demand for the Cape and its nearby islands.

That may seem small, but backers have argued that a rapid expansion of offshore wind farms along the nation's coasts could provide, in aggregate, a substantial and reliable power resource. And from Cape Wind's earliest days, advocates noted that clean-energy development in the U.S. was already lagging woefully behind other parts of the world, principally Europe, which had already spent a decade developing offshore wind power by the time Cape Wind was first proposed. Today, there are more than 1,600 offshore wind turbines at 55 different facilities and representing more than 3,800 megawatts of capacity connected to the European grid, according to the European Wind Energy Association. Several that would dwarf Cape Wind in size and output are already being planned.

China, a gluttonous consumer of coal-fired electricity, nonetheless has at least one commercial-scale offshore wind farm of its own, and several more are in the works.

There are still no offshore wind farms in the United States.

To supporters of renewable energy, this is inexplicable, particularly given the imperatives of climate change and the comparative social advantages of clean power. A year of operation of a comparable coal power plant, Cape Wind's developers say, could produce as much as 1.5 million tons of carbon dioxide -- the leading planet-warming gas -- and tens of thousands of tons of other airborne chemicals and pollutants, including nitrogen oxides, sulfur dioxides and asthma-inducing particulate matter. Natural gas-powered plants are much cleaner, but they still have abundant emissions.

A year of operation of an offshore wind farm like this produces no such pollution.

Of course, even accepting these benefits, opponents have fought tenaciously to keep it out of Nantucket Sound. As the project has inched its way through an obstacle course of state and federal agency approvals -- 17 in all, by Rodgers' count -- critics have challenged each approval with relish in court. In fact, the project has been in an indeterminate state for so long that it has been the subject of at least two books, hundreds of editorials and a pair of documentary films, including last summer's "Cape Spin" -- described by The New York Times as a "tragicomic" look at one of the nation's most protracted energy infrastructure battles.


"It was the first offshore wind farm proposed in the U.S., and the nation lacked a clear regulatory path established for how such a project would get approved," Josh Levin, one of the film's producers, told the Times last June. "Whether you are a green person or not, whether you are a renewable energy person or not, whether you're a pro-business person or not, there is a cost to the United States having no effective energy policy."

BOGGED DOWN

When the Cape Wind project received its final nod from the Interior Department in the spring of 2010 -- already a decade after the project was first proposed -- the editorial board at The Wall Street Journal chuckled. Having long decried the nominally higher costs of wind power relative to fossil fuels, the generally conservative newspaper had never been a friend to the Nantucket wind farm. But it had even deeper disdain for the protracted regulatory and judicial review that had kept the project in limbo for so long.

"Contemplate this depressing change in America's can-do spirit," the editorial suggested. "The 6.6 million-ton Hoover Dam that tamed the mighty Colorado River was finished in 1936 after a mere five years. Yet 130 offshore wind turbines, a pioneering project of President Obama's 'new energy economy,' may take three times as long to complete."

Three more years have slipped by since that editorial was written.

To be sure, Cape Wind was challenged in part by its uniqueness. The U.S. had no history of permitting offshore wind farms -- a task that fell initially to the Army Corps of Engineers, which took roughly three years from the time the project was first proposed to prepare a lengthy Draft Environmental Impact Statement, as required by the decades-old National Environmental Policy Act. Some 5,000 public comments were submitted on that draft, but it would be quickly rendered moot by passage of the Energy Policy Act in 2005, which shifted jurisdiction for offshore wind permitting from the Army Corps to the Department of the Interior.

To the dismay of Gordon and his partners, Interior decided to pursue its own environmental review, which would not be published in draft form until three years later, in early 2008. A final environmental impact statement was completed in January 2009.

"Sure, we can chalk it up to the fact that this was the first proposed offshore wind farm in the United States and that we were paving new ground," Gordon said, "but there have been structures permitted in the water for many decades. There have been fiber optic cables, weather towers, bridges, piers, docks, things like that."

On its face, a NEPA review would seem straightforward.

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The various environmental impact statements and reports prepared for Cape Wind, representing years of work and thousands of pages. Although the covers of many of the binders are the same, the contents are all different, says Cape Wind's spokesman, Mark Rodgers.