Summer, 2008 comes to a close, and just as…

Cape Wind nears completion of its rigorous Federal and State permitting review. New Englanders pay record prices for the oil, gas, coal they must import into the region to generate electricity. Massachusetts passes ambitious energy legislation with a goal of positioning the Commonwealth as a global leader in clean energy. Public desire to build clean energy projects and finally become more energy independent and take action on global warming is stronger than ever. Support for Cape Wind in Massachusetts has grown to 86%.

Just as all of these things are happening, the well-funded organization that formed for the single purpose of opposing Cape Wind, is lashing out.  The opposition group has been spending vast sums of money in a misleading advertising campaign during the past seven years to try to make people living on Cape Cod and the Islands afraid of Cape Wind.

For the first time in four years, Cape Wind has taken to the airwaves with a radio ad of its own so that residents and visitors alike can finally hear from both sides on the radio.  The ad features a couple discussing energy prices, Cape Wind and the opposition group.

Click here to hear Cape Wind’s radio ad (.mp3)
 
If you’ve already heard the ad and want to learn more, you’ve come to the right place, please keep reading…

The information below is organized into two columns.  The information in the left column are further details about energy prices and an examination of the claims made by the opposition group and of two key decision makers in that organization.  The information in the right column covers important Cape Wind highlights on a range of other topics.

Big Picture Most of the electricity used in New England is generated by power plants that burn oil, natural gas, and coal – all fuels that must be imported into New England from other regions and countries.  Since Cape Wind was first proposed, oil prices have quadrupled, and natural gas and coal prices have more than doubled.  Many energy experts believe that in an increasingly globalized economy with growing energy demand centers in China, India and other regions, that the era of inexpensive fossil fuels is gone forever.  Fossil fuel prices will remain volatile, meaning they will continue to go up and down, but the long term price trend for these fuels will continue to rise.  Having to import all its fossil fuels, New England is at the end of often long supply lines and is particularly vulnerable to any disruptions that can be caused by weather or geopolitical events. The Economics of Energy Electric Grid Manager of New England The Independent System Operator of New England (ISO NE) manages the electric grid of New England and is accountable for providing electric reliability.  In 2006, ISO NE published a report, Electricity Costs White Paper, that found that high fossil fuel prices were driving electricity prices higher and that, “The development of power plants using low-cost fuels, such as wind…can lower power costs by displacing the operation of higher-cost power plants.”  The ISO NE report expands on this by explaining, “Because the lowest-priced resources are selected first for commitment and dispatch, adding an inexpensive resource necessarily displaces the otherwise marginal units, lowering prices throughout the region.  This effect can be significant.”  Finally, in a reference to organizations like the one that formed to oppose Cape Wind, ISO NE concluded its report stating, “Adding new low-cost resources could have a large price effect; though not discussed in this paper, difficulties in siting these resources are an impediment to this market response.”  Looking back on this important 2006 report, it can be noted that fossil fuel prices have risen higher in the past two years than had been anticipated.   The generic description provided in the ISO NE report of how a wind farm can lower electricity prices has been found to also be true of the Cape Wind proposal specifically.  Massachusetts Energy Facilities Siting Board Evaluation of Cape Wind The Massachusetts Energy Facilities Siting Board (EFSB), in approving Cape Wind’s application in 2005 to connect into the electric transmission system concluded, “The record shows that the wind farm will tend to reduce market clearing prices for electricity because it will … displace power plants with higher marginal costs. The savings resulting from this displacement would accrue to electric customers, and are estimated to be $25 million per year for New England customers….” EFSB 02-2, p. 162.  The EFSB’s conclusions about Cape Wind followed a 32-month review that included 2,900 pages of transcripts, 923 exhibits and 50,000 pages of documentary evidence. Evaluation of Opposition Group’s Claims The opposition group to Cape Wind makes irresponsible and unsubstantiated forecasts about large price increases they suggest would accrue to electric consumers on Cape Cod and the Islands if Cape Wind were built.  They claim to justify their assertions on a table in a Minerals Management Service report that sought to compare the relative economic viability of offshore wind projects on a variety of alternative sites.  The MMS report found Cape Wind’s proposed site of Horseshoe Shoal was more economically viable than any of the other sites, a finding the opposition group never mentions.  Instead, the opposition group uses the report to argue that electricity generated by an offshore wind farm on Horseshoe Shoal would cost more than the average wholesale electric price.  That analysis is flawed in at least two respects, first, wholesale electric prices have increased considerably from those used in that analysis, and second, this same MMS report states that "a rigorous analysis of revenue streams was not conducted", and that the draft model "does not give a precise estimate" of the cost of energy required for profitability, and thus "should not be construed as a profitability forecast."  The author of the report seems almost to anticipate the Alliance’s misleading use of it when he also states, "References to the apparent profitability of development at any of the sites could therefore be misleading, and will not be made in the EIS." The opposition group also suggests that news of two offshore wind proposals being cancelled for economic reasons, one offshore Texas and another offshore Long Island, is somehow evidence that Cape Wind must also be uneconomic.  That suggestion ignores the fact that every project and every site is different and must be evaluated on its own merits.  In fact, in the case of the Long Island project, Cape Wind predicted back in 2003 that proposed project would be uneconomic because of the high wave heights at the site and because of an insufficient economy of scale.  Perhaps the one area of agreement on this general subject between Cape Wind and the opposition group is that the cost of developing offshore wind farms has risen in recent years.  But so too has the cost of building any new type of electric generation.  Articles in the Wall Street Journal and New York Times make it clear that costs to build new nuclear, natural gas, wind and other types of power have all escalated considerably in recent years due to rising commodity prices.  At least in the case of a wind farm, once the project is built, the fuel it uses is free.  In the case of a new fossil fuel power plant in New England, not only have the capital costs to build it increased substantially but every hour it runs it will have to buy ever more expensive imported fuel. Cape Wind has always maintained that to become a reality, it will need to provide economic as well as environmental benefits.  Since Cape Wind will not be exposed to further fossil fuel price increases, it will offer the electric marketplace stable prices over a twenty year period.   Long-term stable pricing from Cape Wind will offer consumers a natural hedge against future increases in the world energy markets in the coming decades. Opposition Group’s Leadership Ties to Coal and Oil Industries Finally, it is also worth noting the ties of key individuals in leadership positions of the opposition group to the coal and oil industries.  The Co-Chair of the Board of Directors of the opposition group and also the group’s largest (known) donor is Bill Koch who owns Oxbow,   his own privately held energy company that owns coal mines and sells coal combustion waste and petroleum coke.  Petroleum coke is a solid leftover from the oil refining process that some claim to be more polluting than coal.   While it is not known the total amount that Koch has spent to oppose Cape Wind, it was reported in a 2006 Forbes article that he had spent $1,500,000 and a Boston Globe article about the discovery of internal fundraising documents of the opposition group identified a Koch donation of  $500,000. In addition to these donations, it has been reported in the Cape Cod Times, Cape Cod Today  and the Cape Cod Voice that Koch has used his energy company to deploy lobbyists against Cape Wind in Washington, D.C.  Earlier this year it was reported in the Boston Globe that Oxbow and the opposition group appeared in the same lobbying disclosure form.  Examinations of Oxbow’s 2006 lobbying disclosure forms suggest that up to $600,000 was spent that year alone in lobbying activities against Cape Wind. Koch’s opposition to Cape Wind first came to light in an Op Ed in the Providence Journal by Jeff Blanchard who had interviewed Koch.  One notable quote from the interview:  “"I was telling one of my guys when this [wind farm] first came up, 'I wish I'd thought of this!' But as a businessman, I said I wouldn't have put it in my backyard -- I would have put it in someone else's backyard!"  Koch owns a large home on Oyster Harbor, in Osterville, overlooking Nantucket Sound. The CEO of the opposition group, Glenn Wattley, was reported by the Cape Cod Times when he took that position in 2007 as a ‘coal industry insider’ who was ‘unapologetic’ of his coal industry background.  Indeed, Mr. Wattley had been a frequent guest on CNBC as an expert on the coal industry, once describing coal investments as “sexy.”  Ironically, though Mr. Wattley often asserts that Cape Wind would be too expensive, he also has repeatedly endorsed government subsidies for coal sequestration projects, and yet the U.S. Department of Energy cancelled the first major coal sequestration project called FutureGen earlier this year because they deemed it too expensive. In 2005, Greenpeace posted a page to its website about the opposition group to Cape Wind, which it describes as an “Orwellian group.”		Cape Wind: Poised to Deliver Public Benefits Energy Independence.  Each year Cape Wind will produce as much energy from wind as a fossil fuel power plant consuming 570,000 tons of coal or 113 million gallons of oil.  Wind is a local, abundant and inexhaustible source of power.  New England currently imports all of its fossil fueled energy needs. Clean Energy.  Cape Wind’s clean energy would offset operations of fossil fueled power plants resulting in reduced emissions of air pollution and greenhouse gasses.  The Natural Resources Defense Council calls Cape Wind, “the largest single source of supply-side reductions in CO2 currently proposed in the U.S.” Good Jobs.  Cape Wind will produce hundreds of jobs.  Cape Wind will make Massachusetts a world leader in offshore renewable energy. Power During Most Times of Greatest Need.  During 11 of the last 12 summer electric demand peak events, Cape Wind’s Scientific Data Tower on Horseshoe Shoal reported above average wind conditions.  Due to the sea-breeze effect, Cape Wind would usually provide significant quantities of clean power during the hot summer afternoons when electricity demand is at its highest which would reduce the region’s need to run the oldest, dirtiest and most expensive peaking power plants used to keep the lights on.  The U.S. Department of Energy also published a White Paper that found Cape Wind would also tend to produce significant quantities of electricity during the coldest winter conditions, a time when quantities of available natural gas for electric generation can be insufficient because of its increased use by the heating sector. Support for Cape Wind Cape Wind has received the support of respected environmental organizations including Conservation Law Foundation, Sierra Club, Union of Concerned Scientists, Environment Massachusetts and Greenpeace as well as major labor unions, health organizations, and trade groups.  According to the most recent independent surveys, Cape Wind is supported by 86% of Massachusetts residents and a majority of Cape Cod and Islands residents.  Cape Wind has received favorable editorials in the New York Times, Washington Post, Washington Times, USA Today, Boston Globe, Boston Herald, Providence Journal and many other publications. Major Cape Wind Milestones: November, 2001:  Cape Wind Files Permit Applications November, 2004:  U.S. Army Corps of Engineers issues largely favorable thirty eight hundred page Draft Environmental Impact Statement May, 2005:  Massachusetts Energy Facilities Siting Board Approves Cape Wind Electric Interconnect Summer, 2005:  Congress passes and President signs the Energy Policy Act of 2005 giving Minerals Management Service (MMS) authority to regulate and approve offshore wind power projects March, 2007:  Massachusetts Energy and Environment Secretary Ian Bowles approves Cape Wind’s Final Environmental Impact Report January, 2008: MMS issues Draft Environmental Impact Statement (DEIS) and announces it expects to make a final permit decision by the end of 2008.  Approximately 41,000 of the 42,000 public written comments submitted to the MMS on their DEIS support Cape Wind.