Wind farm off Cape Cod a test for future of energy industry

ABOARD THE IDA LEWIS — Interior Secretary Ken Salazar journeyed out into Nantucket Sound on a Coast Guard vessel last week to signal the Obama administration's readiness to put some muscle behind wind energy. To do that, Salazar has to resolve a battle over building a wind farm on 25 square miles of open water here that has driven a rift between environmentalists, infuriated local Native Americans, and threatens one of the administration's cherished priorities.

The nearly decadelong fight over whether to construct a 130-turbine offshore wind farm near Martha's Vineyard has spurred numerous state and federal regulatory reviews. It has cost millions in lobbying fees and has prompted an intense political debate on Cape Cod and in Washington, setting those who back renewable energy against those who want to preserve the natural beauty of Nantucket Sound.

"The worst thing we can do for the country is to be in a state of indecision, and this application has been in a state of indecision for a very long time," said Salazar, who came to see the proposed site of the Cape Wind project and to meet with tribes that oppose it.

With many other obstacles resolved, including the wind farm's potential hindrance to navigation and fishing and harm to birds, the tribes represent the project's latest challenge: They practice a sunrise ritual every morning on the sound and say they may have artifacts buried beneath the seabed. They have managed to qualify the sound for listing on the National Register of Historic Places, which could restrict its commercial use.

Salazar got up before dawn Tuesday last week to observe a site where the Mashpee Wampanoag's sunrise ceremony takes place before meeting with representatives of the Aquinnah and the Mashpee tribes.

He said that although his department is trying to broker a deal between the tribes and Energy Management, the company seeking to build the farm, "I'm not holding my breath for a consensus." And if the two sides cannot resolve their differences, he said, he will do it himself by April.

The venture stands as a critical test of whether the Obama administration, which views investing in renewable energy as key to reviving the economy and combating climate change, can launch the clean-energy revolution it has promised voters.

Ian Bowles, the Massachusetts energy and environmental-affairs secretary, called the Cape Wind project "symbolic of America's struggle with clean energy. Its symbolism has risen above the number of megawatts."

Both sides agree that this offshore wind project, which would be the first in the United States and would furnish about 75 percent of Cape Cod's energy, shows just how hard it will be to construct wind farms off America's coasts.

"The tortured history of Cape Wind is not just a not-in-my-backyard story of fisherman and wealthy people on the Cape," said Michael Moynihan, director of the Green Project at NDN, a centrist think tank. "It is emblematic of the difficulty of getting wind online, anywhere in America, with a system designed a century ago that is frankly hostile to renewable energy."

Wind energy still remains a tiny player, providing less than 2 percent of the nation's supply. Although the United States leads the world in total wind capacity to its power grid, it ranks fifth on a per-capita basis. Last year, China outpaced it for the first time in terms of new installations and manufacturing of wind turbines.

In the short term, land-based wind projects represent a better investment because they can win federal approval faster than the roughly dozen offshore ventures now pending, according to Sanjay Shrestha, a senior analyst for Lazard Capital Markets. "If you can do it onshore and do it quicker, why wouldn't you do it? he asked.

Under Salazar, the Interior Department has launched a concerted effort to streamline approval for offshore projects. In April, the Minerals Management Service (MMS) finalized rules for placing offshore wind farms, allowing states to decide where and under what terms they will accept bids for wind projects. Salazar has invited the governors of every East Coast state to meet with him Feb. 19 to devise a regional strategy for wind development off the Atlantic Coast.

But these moves have not resolved some of the structural problems facing renewable energy, including that utilities have little incentive to gamble on cutting-edge technology that will raise the costs to consumers in the short term. Even under the new permit system, any project must be vetted for compliance with the Endangered Species Act, the National Historic Preservation Act and several other federal laws.

"It's not going to happen overnight," said MMS Director Liz Birnbaum.

"What happens to Cape Wind, whether it goes up or goes down, will not be determinative of wind energy in the United States," Salazar said after traveling to the stretch of water where the wind farm would be built. "The president and the department have made renewable energy one of the imperatives in our country."

"It's representative in that there are trade-offs and conflicts," said Interior Deputy Secretary David Hayes, who is overseeing the Cape Wind decision. "That's true of oil and gas, and it's true for renewable energy."