Harnessing Cape Wind’s Royalty Payments
It has been a long road for Cape Wind: seven years of planning, untold millions spent, scores of public hearings, thousands of pages of written testimony and exhaustive review by a host of federal agencies, chief among them the Minerals Management Service, an arm of the U.S. Department of the Interior. Two weeks ago Cape Wind scored an important win. The release of a favorable environmental impact statement by Minerals Management all but clears the way for developer Jim Gordon to secure a lease with the federal government to build his wind farm on public seabed. If it goes forward, it will be the first private offshore wind farm in the United States.
To be sure there are still hurdles to clear, including legal battles, some already under way and others still to come. One dispute centers around the Cape Cod Commission’s procedural denial of the land transmission portion of the wind farm project. Cape Wind has challenged the commission’s jurisdiction and wants to bypass its review in favor of one by the state Energy Facilities Siting Board. The dispute remains unresolved and while it involves only a small portion of the wind farm project, the issue looms large in the context of protecting the powers of the Cape Cod Commission, and by extension the Martha’s Vineyard Commission. The Vineyard commission has intervened in the matter, as has the town of Edgartown.
Meanwhile, in about two weeks Minerals Management is due to release a record of decision stating whether a lease will be issued to Cape Wind. The decision is expected to be favorable.
In addition to securing various other permits, Mr. Gordon must secure financing for his project. As it stands now, the Cape and Islands region will receive no direct compensation from Cape Wind. Energy experts also say that even if the project is built, the region is unlikely to see reduced utility rates.
If the lease is approved, under a United States code Cape Wind must make royalty payments to the government for leasing a seabed in federal waters, similar to the oil drilling companies. The state of Massachusetts is expected to receive about twenty-seven per cent of this money, conservatively estimated in the millions of dollars.
The Vineyard Energy Project and the Vineyard Conservation Society are now working to see that a portion of these royalty payments are returned to the Cape and Islands. The Martha’s Vineyard Commission has endorsed the idea of legislation, and Cape and Islands lawmakers are on board.
In the last seven years we have learned that balancing the interests of developing clean renewable energy with the interests of protecting the marine environment is a difficult business indeed. If Cape Wind goes forward, some kind of payment to this region to mitigate the impacts of building a giant industrial wind farm in the middle of a pristine ocean sanctuary and historically rich fishing ground should be required.
This is a plan that deserves strong support from all sides, no matter what their position is on the wind farm.