[*PG177]CONGRESS, THE COURTS, AND THE ARMY CORPS: SITING THE FIRST OFFSHORE WIND FARM IN THE UNITED STATES
Abstract: Once considered an issue only for environmentalists, renewable energy has entered the mainstream dialogue as fears of climate change, acid rain, and dependence on foreign sources of fuel become more prevalent. There is now broad support for adding renewable energy, including wind power, into our nation’s fuel mix. Technological advances have allowed wind power to compete with traditional fossil fuels and lessen other potentially harmful impacts. Land-based wind power is widespread globally, and offshore wind facilities have been operating in Europe for over a decade. While there are currently several proposals for large-scale offshore wind farms in the United States, no such facilities have been sited to date. An intense legal controversy has emerged, stemming from a proposal to site a wind farm off the coast of Massachusetts. The outcome of this dispute will have important consequences for future proposals for offshore wind farms.
Scientists, policy analysts, and the public have long debated the potentially devastating impacts of traditional fossil fuels on our environment and our economy. Fears of global climate change, acid rain, health impacts, and lately reliance on foreign sources of fuel have dominated national headlines. In recent years, the winds of change have redirected the dialogue on energy policy, focusing attention on the benefits of renewable energy. Wind energy has stirred the air, generating a heated debate over the merits and drawbacks of alternatives to fossil fuels.
Until recently, the term renewable energy was found only in the lexicon of environmentalists, a throwback to the 1970s when oil prices resulted in long lines at the gas station. Yet there is now strong, broad-based support for including renewable energy in our nation’s fuel [*PG178]mix.1 Wind energy—the world’s fastest growing energy resource—leads the way towards less reliance on fossil fuels.2 In spite of its tremendous benefits, however, wind is not a holy grail, and the possibility of offshore wind farms has sparked a controversy that has captured much of the nation’s attention.3
Historically, wind power in the United States has been land-based, often located in remote, underutilized locations.4 In the last few years, however, there have been a number of proposals to harness offshore wind along the eastern seaboard, within miles of heavily populated areas and along a coastline valued for its fisheries, aesthetics, and recreational attributes.5 These offshore wind farms could generate enough electricity to power entire regions, while dramatically decreasing toxic emissions and reliance on fossil fuels.6 Yet fears of 300-foot spinning blades and blinking navigational lights blanketing the horizon have caused an uproar that threatens to drown out wind power’s loudest advocates.7
This Article explores the debate that has developed over wind power. It begins with a brief discussion of wind power’s dramatic growth abroad and, to a more limited extent, in the United States. This is followed by an accounting of technological advances and federal and state renewable energy policies, each of which impacts wind energy’s costs and its ability to compete with traditional fossil fuels. To provide context, there is a brief comparison of land-based and offshore wind. The [*PG179]Article then describes the most prominent offshore wind proposals in the United States, and explores the intense legal controversy that has emerged in response to a project proposed off the coast of Massachusetts—a project referred to simply as Cape Wind.8 The contentious permitting process of the U.S. Army Corps of Engineers (the Corps), the vehement arguments of the project’s supporters and detractors, the federal court’s view, and Congress’s response—these are all elements of Cape Wind’s turbulent journey, and part of a developer’s quest to site the first offshore wind farm in the United States.9
Wind is often referred to as the world’s fastest-growing energy source.10 Wind energy advocates proudly proclaim that global wind power generating capacity has quadrupled over the past five years. At the end of 2002, wind was generating enough energy worldwide to power the equivalent of 7.5 million average American households.11 The most dramatic growth has been in Europe: a total of 5871 megawatts (MW)12 of wind energy was installed in the European Union in 2002, and total regional wind power capacity grew thirty-three percent to 23,056 MW.13
Although Europe has four to five times more wind projects than the United States, the last five years have shown dramatic growth in the United States, rivaling that of Europe.14 In 2003, wind projects were completed in seventeen states and installed wind generation reached almost 1691 MW.15 By the end of 2003, the country’s total installed capacity reached 6337 MW, “elevating the U.S. in world ranking to second place behind Germany.”16 It is widely expected that the wind power industry will continue to grow at the rate of the past five years.17 As described below, this rapid rate of development is largely due to a combination of decreasing costs and government incentives.18
Technological advances have allowed renewable energy to compete with conventional sources of power.19 Such developments have helped increase the amount of electricity produced, thereby increasing efficiency and reducing the cost per kilowatt-hour (kWh).20 Renewable energy is now cheaper and more efficient. The costs of generating wind power have decreased by more than eighty percent in twenty years, from thirty cents per kWh in the early 1980s to less than five cents per kWh in 2002.21 In 2001, electricity produced in high wind speed areas was sold at an average of four cents per kWh and an average of six cents per kWh in lower wind speed sites.22 Researchers believe costs may be reduced an additional thirty to fifty percent as the technology continues to improve.23
By 2013, most sources of renewable energy are expected to be competitive with grid power, such as gas and coal, particularly if finan[*PG182]cial incentives are available.24 While “[m]any renewable energy options are now relatively mature technologically, . . . markets remain underexploited primarily due to higher [forward] capital costs relative to conventional options.”25 Long-term government commitment to provide incentives is critical to the success of renewable energy markets.26
Wind industry advocates typically point to the Federal Production Tax Credit (PTC) as one of the main drivers of the U.S. wind market.27 The PTC provides a 1.5 cent per kWh business tax credit, adjusted annually for inflation, for energy produced from a wind power facility during the first ten years of operation.28 Passage of the PTC reflects Congress’s recognition of the important role that wind energy can and should play in our nation’s energy mix. First enacted as part of the Energy Policy Act of 1992, the PTC has been extended twice over the past five years, but each time Congress allowed the [*PG183]credit to expire before acting, and then only approved short extensions.29 Because a wind power project can take several years to permit and construct, the absence of a stable national policy regarding wind power technology has presented a major challenge to the American wind energy industry, resulting in several boom and bust cycles.30 Uncertainty about the PTC in late 2001 led to a seventy-three percent decline in capacity additions the following year.31 Extension of the PTC is widely viewed as necessary to provide a stable financial environment for market development of wind energy.32
In 2003, Congress allowed the PTC to expire for a third time, once again leading to economic uncertainty in the wind industry.33 A three-year PTC extension was included in the conference version of House Bill 6—comprehensive energy legislation considered by the 108th Congress late in its first session.34 Section 1302 of the bill would [*PG184]have amended � 45 of the Internal Revenue Code by extending the PTC to wind facilities originally placed in service after December 31, 1993 and before January 1, 2007.35 The House passed House Bill 6 in a 246 to 180 vote, but Senate Republicans were unable to garner enough support to send the measure for final passage.36 The decision to terminate debate on House Bill 6 in 2003 ostensibly delayed the issue to early 2004 when the 108th Congress returned for its second session.37 Congressional leaders have acknowledged the importance of acting quickly to enact energy legislation that includes a PTC. Senate Majority Leader Bill Frist (R-Tenn.) announced that resuscitating the energy bill would be the top priority for Congress in 2004, while Chairman Dominici underscored the need to act quickly on the energy bill, citing the December 31, 2003 expiration of the PTC.38
In February 2004, Chairman Dominici introduced a pared-down version of the Energy Bill of 2003—Senate Bill 2095—which would extend the PTC through December 31, 2006.39 Unlike House Bill 6, Senate Bill 2095 would cancel the existing inflation adjustment provision and fix the PTC at its current level of 1.8 cents per kWh for all wind projects placed in service after September 30, 2004.40
[*PG185] Uncertainty about the fate of the energy bill led Senate Finance Committee Chairman Chuck Grassley (R-Iowa) to propose a one-year extension of the PTC through an amendment to Senate Bill 1637, the corporate tax bill.41 While wind advocates would welcome the stop-gap one-year extension, they continue to argue for a three-year extension to mitigate the legislative uncertainty created by an extension that would expire again only months after enactment.42
According to the American Wind Energy Association (AWEA), the PTC’s expiration at the end of 2003 will cause “yet another damaging ‘boom-and-bust’ cycle for the industry.”43 Randall Swisher, executive director of AWEA, states that “[i]t is impossible for the U.S. wind industry to maintain a steady growth rate in the present climate of uncertainty.”44 He further states that “[f]ailure to extend the PTC means that contracts are put on hold, workers are laid off, and the momentum that had built up this year in the U.S. wind energy market is once again brought to a halt.”45
Although House Bill 6 included an extension of the PTC, the bill was criticized for not going far enough to support renewable energy by failing to include a national renewable portfolio standard (RPS).46 An RPS generally requires that any company selling electricity in a competitive market include renewable energy as a percentage of its portfolio of generating sources.47
The energy bill passed by the Senate in July 2003 included an RPS, requiring major electric companies to gradually increase sales of electricity generated from wind, solar, and other renewable sources to approximately ten percent by 2020, potentially stimulating a significant U.S. market.48 Yet a federal RPS was largely opposed by the Republican leadership, which controls Congress,49 the White House,50 and the conference committee charged with producing the final [*PG187]compromise bill.51 Facing an uphill battle, a majority of U.S. Senators signed a letter supporting a “‘strong renewable portfolio standard,’” and urged the conference committee “not to leave the provision on the cutting room floor.”52 Nevertheless, the final version of the bill to emerge from the conference committee did not include an RPS.53
While members of Congress may disagree whether to enact a national RPS, over twenty-five percent of the states have established their own.54 A state mandated RPS creates an immediate demand for renewable energy and helps to establish a marketplace by ensuring a steady increase of installed capacity. In doing so, state-based RPSs are thought to be one of the most important factors driving the development of new renewable energy sources in the United States, and are essential for the industry’s long-term stability.55 RPS requirements vary widely from state to state.56
[*PG188] In addition to RPSs, a number of states provide other incentives designed to spur the generation of renewable energy, including wind power, and to help renewable energy compete with traditional fossil fuels.57 Examples include tax credits and exemptions, rebates, grants, loans, green-labeling requirements, green power purchasing programs, and tradable renewable certificates, in the form of green tags or renewable energy credits.58
Europeans have been constructing offshore wind farms for more than a decade; a five MW installation near Vindeby, Denmark, came online in 1991.59 By the end of 2002, ten offshore wind farms were operating worldwide—all in Northern Europe—with a combined generating capacity of 250 MW.60 A comprehensive study commissioned by the Corps identified a total of twenty-three offshore wind farm projects with a total capacity over 2000 MW, which have been constructed recently or which were considered certain or likely to [*PG189]come into commercial operation in the next two to three years; all of these sites are also in Northern Europe.61 That study included only the largest wind projects in its figures, and sources suggest the total number of offshore wind projects could be much higher. For example, according to the industry publication Windpower Monthly, there are now twenty-four German offshore wind projects planned in the North Sea outside the twelve nautical mile zone, totaling sixty-four gigawatts (GW).62 Britain is also well-positioned to be a leader in offshore wind. In 2003, Britain launched its first large-scale offshore wind farm, siting thirty turbines four to five miles off the North Wales Coast; many more large scale projects are planned.63
While Europeans power ahead, wind advocates have yet to harness offshore winds in the United States. Pioneering efforts have resulted in over twenty proposals for wind farms along the U.S. eastern seaboard, but, to date, none has been built or even permitted.64 Why is Europe ahead of the United States in the installation of offshore wind? High energy prices, excellent wind resources in the North and Baltic Seas, and the proximity of the wind resource to highly populated regions have enhanced the development of offshore wind farms in Northern Europe.65 Europe also has aggressive government policies promoting green energy, evidenced by European support of the Kyoto agreement [*PG190]to reduce emissions of greenhouse gases.66 In contrast, lower energy prices and more abundant land based wind resources have delayed the development of offshore wind in the United States.67
A combination of economics and energy policy is advancing efforts to harness offshore winds in the United States, particularly off the populated eastern seaboard where ocean depths are relatively shallow.68
Many of the United States’ strongest wind resources are located in the Great Plains or the western part of the country; the windiest sites, however, are generally located in remote areas lacking ready access to power transmission lines.69 Transferring the energy from remote generation sources to load centers involves high costs.70 Significantly, more than half of the U.S. population resides on the coasts, close to potential offshore wind locations.71 Offshore areas can accommodate larger scale projects that can service regional load centers, avoiding higher transmission costs incurred by remotely located wind farms.72 In addition, Connecticut, Massachusetts, and New Jersey are examples of densely populated northeastern states that have established RPSs.73 Wind is one of the lowest cost alternatives available to satisfy RPS requirements.74
[*PG191] Offshore winds are typically stronger and less turbulent than land-based winds, increasing the revenue potential.75 Although the location at sea increases construction and maintenance costs, these higher costs tend to be offset by the increased chances for energy production resulting from more favorable wind conditions.76 Reduced wind shear over water allows offshore wind farms to be designed to last for fifty years, rather than the twenty to twenty-five years typical for land-based installations.77 Offshore wind farms can be refurbished after twenty-five years, allowing for a longer amortization period for the higher initial investment.78
At present, at least three distinct development entities are striving to build the first offshore wind farm in the United States.79 Cape Wind Associates (Cape Wind), a private energy company comprised of experienced energy plant developers, proposed the first offshore wind farm after reviewing extensive data and narrowing potential locations to a single site off the coast of Massachusetts.80 Just over a year later, the Long Island Power Authority, a non-profit public utility in New York State, issued a request for proposals for a wind farm along [*PG192]the southern shore of Long Island.81 Around the same time, Winergy LLC (Winergy)—directed by two entrepreneurs with experience in marine aquaculture, but no relevant energy experience—proposed wind farms at twenty-one potential sites along the East Coast.82
Cape Wind is proposing to install 130 wind turbines off the coast of Massachusetts, with a total maximum output of 420 MW.83 If built, Cape Wind could be the largest offshore wind farm in the world.84 The developer’s preferred site—Horseshoe Shoal in Nantucket Sound, over five miles from the town of Hyannis on Cape Cod85—is the optimal location based on wind speeds and direction.86 Turbines will be spaced one-half to one-third of a mile apart and connected by undersea cables.87 Although the wind farm will be spread over a twenty-four square mile area, it will only physically occupy two acres.88 [*PG193]The shoal is shallow, which would arguably simplify construction and minimize interference with marine traffic and commercial fishing.
Cape Wind has installed a 196-foot high scientific monitoring station, which functions as a data or test tower.89 Data collected will provide information on wind, waves, tide height, currents, and water temperature.90 The data tower was permitted by the Corps pursuant to section 10 of the Rivers and Harbors Appropriations Act of 1899 (section 10 or RHA).91 The Corps is currently preparing a draft Environmental Impact Statement (EIS) for the wind farm under the National Environmental Policy Act (NEPA).92
The Cape Wind project has been a lightning rod for debate over the potential benefits and impacts of an offshore wind farm, and has encountered vehement local opposition. Opponents argue the developers are simply making a “land-grab, co-opting a public resource for private gain.”93 Supporters of Cape Wind accuse its detractors, many of whom are wealthy local landowners, of crying “not in my backyard.”94 The project has been the subject of countless public meetings, [*PG194]including a series of stakeholder meetings hosted by the Massachusetts Technology Collaborative (MTC), the commonwealth’s renewable energy development agency.95 The project has also triggered several law suits,96 and both federal and Massachusetts lawmakers have introduced legislative alternatives that would potentially impact the development process.97 A number of the legal issues raised by the Cape Wind project are discussed in detail below.
In January 2003, the Long Island Power Authority (LIPA) issued a Request for Proposals (RFP) to develop an offshore wind farm off the south shore of Long Island, New York. The RFP proposed a project consisting of twenty-five to fifty offshore wind turbines generating approximately 100 to 140 MW of electricity.98 LIPA prepared a Siting Assessment that restricts the placement of wind turbines to a five square-mile area of open ocean no closer than 2.5 nautical miles from shore, with water depths averaging about sixty feet.99 The proposed site is in reasonable proximity to three land-based substations owned and operated by LIPA. One or more of these substations could be used to connect the wind turbines to Long Island’s electric grid.100
[*PG195] LIPA hopes the plant will be completed and generating energy by 2007.101 In late August 2003, LIPA announced that it had narrowed the field to two potential candidates.102 LIPA intended to make a decision in the fall but has delayed announcing the award. Sources say LIPA has narrowed its choices to New York City-based Arcadia Windpower LTD, and FPL Energy, a subsidiary of Florida Power & Light.103 Although some have come out in opposition to the LIPA project, to date it seems to have avoided the controversy generated by Cape Wind. This muted public response may simply be due to the lack of exposure: LIPA officials have generated little publicity about the project since January 2003, and the formal permitting processes have yet to commence.104
Winergy originally targeted twenty-one potential wind farm locations along the East Coast of the United States.105 The company later narrowed its list to seventeen proposed sites, and most recently has focused its permitting efforts on a site off Virginia’s coast.106 The developer’s intent, it appears, is not to install wind farms at all of the proposed sites—or even the vast majority of them—but to use the permitting process to eliminate the most controversial locations.107 [*PG196]This strategy has exposed Winergy to charges of speculation and improper use of limited public resources.108
In attempting to respond to this deluge of offshore wind farm proposals, government regulators quickly found themselves in a reactive mode.109 Despite the expanse of U.S. coastal resources, federal and state ocean policy had not yet caught up to the rapid developments in science and technology enabling the ocean to be used for offshore wind energy.110 Several efforts to update and coordinate federal ocean policy were underway, but they arguably had not progressed fast enough to provide guidance to regulators reviewing permit applications for proposed projects.111 Regulators and non-governmental stakeholders, concerned about the environmental and economic implications of a coastline flooded with wind farms, began to ask whether existing law was adequate to address the issues posed by this new technology.112 As the first offshore wind project to advance through the permitting process, Cape Wind found itself at the center [*PG197]of a heated controversy.113 The principals behind Cape Wind had previously developed several large energy projects in New England, and therefore probably anticipated that their project would receive a fair amount of public scrutiny.114 Nevertheless, it is unlikely that they anticipated the maelstrom their project would actually generate.
At the outset, Cape Wind envisioned a two-stage development process.115 Cape Wind would initially construct and operate a data test tower in an area of Nantucket Sound known as Horseshoe Shoal, on the Outer Continental Shelf (OCS)—federal waters.116 After data collection, they would construct and operate a 130-turbine wind farm.117 In November 2001, Cape Wind submitted an application to the Corps for a section 10 RHA permit to construct and operate the data tower.118 At the same time, Cape Wind submitted a separate application to the Corps for another section 10 permit, this one to construct and operate the wind farm on Horseshoe Shoal.119
In December 2001, the Corps issued a public notice, announcing that it was considering Cape Wind’s data tower application.120 The public notice stated that the wind farm would be “the subject of a [*PG198]separate and distinct permit and environmental review process with further opportunity for public involvement.”121 Also in December 2001, the Corps determined that an EIS was required for the wind farm project under NEPA.122
Pursuant to NEPA requirements, the Corps issued an Environmental Assessment and a Finding of No Significant Impact for the data tower.123 On August 19, 2002, the Corps issued a section 10 permit to Cape Wind, authorizing it to proceed with the installation and operation of the data tower.124 The decisions to issue the data tower permit and to undertake environmental impact review of the wind farm triggered private lawsuits and a flurry of Massachusetts and federal legislation designed to stop or delay the project.125
The Corps asserted its jurisdiction over the Cape Wind data tower and wind farm pursuant to section 10 of the RHA, as extended by the Outer Continental Shelf Lands Act (OCSLA).126 The RHA requires a Corps permit for installation of a structure in navigable waters of the United States.127 The Corps took the position that its jurisdiction over navigable waters of the United States is extended by the OCSLA to include all submerged lands seaward of state coastal waters which are under U.S. jurisdiction—those lands from 3 to 200 nautical miles offshore.128
[*PG199] As the issuing authority for a federal permit under section 10, the Corps is the lead agency in preparing an EIS for the wind farm project under NEPA.129 In that capacity the Corps coordinates interagency review of the project, incorporating the input of a number of federal regulatory authorities.130 A portion of the wind farm project is also located in state waters,131 triggering thresholds for environmental review under the Massachusetts Environmental Policy Act (MEPA).132 To avoid duplication of efforts, the Corps is working with Massachusetts to conduct a concurrent environmental review.133 On the regional level, the Cape Cod Commission is authorized to review Developments of Regional Impact that present regional issues or potential impacts to the resources of Cape Cod.134 Issues relevant to the Commission’s review will be incorporated into the environmental review process.135
[*PG200] In support of the EIS, Cape Wind must provide the Corps with scientific, engineering, and economic studies and analysis demonstrating that the project is in the public interest.136 The scope of the EIS is broad, requiring an assessment of numerous potential impact areas, including: (1) avian; (2) marine habitat; (3) fisheries and benthic; (4) aviation; (5) telecommunication systems; (6) commercial and recreational navigation; (7) socio-economic; (8) aesthetic and landscape/visual; (9) cultural resources; (10) recreation; (11) noise and vibrations; (12) water quality; (13) electric and magnetic fields; (14) air and climate; and (15) safety.137
Although Cape Wind has stated that Nantucket Shoal is the preferred location for its wind farm, the EIS will also include an analysis of alternate locations,138 including one land-based alternative, three in shallow water, a single location in deep water, two or more smaller sites combined, and a no-build alternative.139 These alternatives must fulfill the project’s purpose and need “to develop a commercial scale renewable energy facility providing power to the New England grid.”140
[*PG201] Some individuals and interest groups have raised concerns that the EIS process has been taking too long.141 Others have complained that the process has been too fast.142 The Corps has taken the position that this will be “a slow and deliberate process. . . . Eventually, we are going to be issuing a draft EIS.”143 While the Corps has refused to set a specific deadline, it has indicated that a draft EIS could be available for public comment sometime in 2004.144 Under that time frame, a final section 10 permit decision could be two years away.145
Cape Wind believes that the environmental review process is more than adequate, and that the data will ultimately demonstrate that building the wind farm at Horseshoe Shoal would result in significant public benefits.146 Yet a vocal opposition argues that the Corps’s existing permit authority was not intended to address a project of this magnitude, and that the review process should cease until a more detailed plan is put into place.147
Wind advocates believe that wind power would help the United States diversify its portfolio of energy resources, providing a more stable alternative to often volatile fossil fuel prices.148 Wind power can [*PG202]provide a local fuel source, decreasing reliance on large centralized plants connected to the high voltage transmission lines that bring power to consumers over long distances.149 Moreover, by reducing pollution that results from burning fossil fuels, wind power can help to improve environmental conditions and public health.150 Transitioning to renewable energy resources such as wind power can also limit development pressure on unique areas such as the Arctic National Wildlife Refuge.151 Several prominent advocacy organizations have voiced their support for Cape Wind, although most have stopped short of endorsing the project, reserving final judgment until the [*PG203]permitting process is complete. In November 2003, a letter from the Conservation Law Foundation and the Union of Concerned Scientists, along with other environmental and public health groups, petitioned federal lawmakers not to delay the review of offshore wind farm proposals.152 These organizations believe that
Wind is a critical renewable energy resource for New England where air pollution, primarily from coal-fired power plants, causes thousands of premature deaths every year. Substantial reductions in emissions of greenhouse gases, nitrogen oxides, sulfur dioxide, and particulate matter from the regional power system must be achieved soon to halt global warming and protect New England’s air and water.153
Wind power critics argue that wind’s benefits are overstated, citing to negative visual and aesthetic impacts,154 the alleged risk posed to birds and other avian species,155 and the lack of a regulatory process [*PG204]designed to allocate offshore resources for public use.156 High-ranking commonwealth officials, including Governor Mitt Romney and Attorney General Thomas F. Reilly, have come out against the project, at least until a more defined legislative and regulatory review process has been established.157 A number of bills aimed at limiting ocean development have been introduced in the Massachusetts general court (or legislature),158 and the commonwealth’s Environmental Affairs Secre[*PG205]tary appointed an Ocean Management Task Force to develop a comprehensive plan to manage the commonwealth’s ocean resources.159
U.S. Representative William Delahunt (D-Mass.), whose district includes Nantucket Sound, commissioned a study to help him determine whether to file legislation to designate Nantucket Sound a National Marine Sanctuary.160 Representative Delahunt also introduced legislation authorizing the licensing of renewable energy projects in federal waters, discussed in detail below.161 U.S. Senators Edward M. Kennedy (D-Mass.) and John F. Kerry (D-Mass.) have both done their best to stay out of the fray. While Senator Kennedy supports wind energy, he has repeatedly voiced concerns about how offshore wind energy projects will be regulated.162 Senator Kerry, a presidential candidate, has likewise expressed his support for renewable energy but has [*PG206]not issued a formal opinion on the project, and is reportedly waiting to hear about the results from the Corps’s EIS.163
The most vocal opponent of Cape Wind has been the Alliance to Protect Nantucket Sound (the Alliance), which at one time had the support of former CBS news anchor Walter Cronkite, the “most trusted man in America.”164 With diverse support ranging from wealthy homeowners to working-class fishermen, the Alliance has set out to defeat Cape Wind.165 The Alliance argues that Cape Wind is aggressively proceeding with the development despite the “complete absence of federal authority for such a project.”166 According to the Alliance, no federal framework exists to evaluate any aspect of the project, including whether private companies have any right to occupy OCS lands or how such development should be allowed to proceed.167 The Alliance disputes that the section 10 permitting process of the RHA, created in 1879 and administered by the Corps, is an appropriate mechanism to regulate the development of large-scale wind energy plants in public waters.168 In its place, the Alliance advocates for a federal programmatic approach that would: (1) identify appropriate locations for wind projects; (2) provide zoning that would set standards to ensure that environmental, public safety, economic, aesthetic, cultural, and navigational issues are appropriately considered; (3) ensure competitive bidding to [*PG207]obtain development rights; (4) mandate royalty payments; (5) divide jurisdiction between the Department of the Interior and the National Oceanic and Atmospheric Administration; and (6) require prior acceptance of a wind energy project by state and local governments.169
Much of the dispute between Cape Wind and the Alliance has played out in newspaper editorial pages, amidst allegations on both sides of misrepresentation and deceit.170 In August 2002, however, the Alliance dramatically raised the stakes by moving the battle into the courtroom. Shortly after the Corps issued a section 10 permit to Cape Wind authorizing it to install a data tower, the Alliance filed suit in the U.S. District Court for the District of Massachusetts.171
The Alliance’s lawsuit challenged the Corps’s decision to issue a section 10 permit to Cape Wind.172 Several arguments were put forth by the Plaintiffs. First, the Alliance objected to the Corps taking jurisdiction over the Cape Wind permit application, arguing that the agency lacks the authority to issue a section 10 permit for activities on the OCS unrelated to the extraction of gas, oil, and minerals from the seabed.173 Even if the RHA applied, the Alliance asserted, the Corps should have denied the permit application because Cape Wind does not have and could not obtain the requisite property interest to construct a data tower on the OCS; as the Alliance pointed out, there is currently no mechanism by which the federal government can confer a property interest in OCS lands for wind energy development.174 Finally, the Alliance alleged procedural deficiencies in the developer’s proposal that violate NEPA.175
The Alliance had high hopes for success, publicly proclaiming that the law was on their side.176 But on September 18, 2003, Judge Joseph Tauro denied the Plaintiffs’ claim on all counts, dashing the Alliance’s wish for an early victory “in what may prove to be a protracted struggle over the construction of a wind energy plant in Nantucket Sound, Massachusetts.”177
In addressing the Corps’s authority to issue a section 10 permit for the data tower, the district court found that the case law has [*PG209]“evolved in such a way that, today ‘a permit from . . . the Corps . . . is required for the installation of any structure in the navigable waters’ of the United States.”178 The court went on to explore the extent of the Corps’s section 10 authority over OCS lands, considering the language of the OCSLA as it was originally drafted, the 1978 amendments to the act, the legislative history of those amendments, and the Corps’s interpretation of its own authority.179 The district court rejected the Plaintiffs’ argument that Congress, in amending the OCSLA in 1978, had restricted the Corps’s authority to issue section 10 permits on the OCS to “those structures erected for the purpose of extracting resources.”180 Rather, the court upheld the Corps’s interpretation of the relevant statutory language, finding that its section 10 authority extends to “all ‘artificial islands, installations, and other devices located on the seabed, to the seaward limit of the [OCS],’ including, but not limited to, those that ‘may be’ used to explore for, develop, or produce resources.”181
The district court also rejected the Plaintiffs’ belief that the Corps’s regulations “‘require that an applicant have sufficient property rights as a prerequisite for a permit.’”182 Rather, the court found that the Corps’s regulations are designed to keep the Corps out of property disputes, and “require only that a permit application ‘affirm[] that the applicant possesses or will possess the requisite property interest to undertake’ its proposed activity.”183 Finally, the court found that the Corps satisfied its obligations under NEPA.184
Judge Tauro’s Alliance to Protect Nantucket Sound decision was the judicial equivalent of a green light, authorizing Cape Wind to proceed to build its data tower, even without a federally granted property [*PG210]interest.185 While the decision was limited to the test tower, it addressed many of the same legal issues that would likely arise in permitting the wind farm—issues which could be addressed by federal legislation.186
Judge Tauro may have been correct in predicting a lengthy struggle. In November 2003, the Alliance filed a notice of intent to appeal, and the case is now on the docket of the United States Court of Appeals for the First Circuit. In December 2003, the Alliance filed its Statement of Issues with the Court of Appeals.187
In March, 2004, after several extensions of time granted by the court of appeals, the Alliance filed its fifty-one page brief.188 In its [*PG211]brief, the Alliance disputes the district court’s ruling that the Corps’s section 10 authority is extended by the OCSLA “to all structures on the OCS, regardless of purpose,” arguing that this interpretation is “contrary to the plain language of the OCSLA.”189
[The district court] placed inappropriate reliance on legislative history that is in direct conflict with the plain language of the statute. . . . In addition, the district court failed to give any deference to the contrary interpretation by the Department of the Interior, the agency charged with administering the OCS under the OCSLA.
Construing the OCSLA to extend Corps jurisdiction to non-mineral activities on the OCS, as . . . accepted by the district court, in effect, encourages, and in fact did lead to, the unauthorized use and occupancy of federally-owned sea bottom lands. It did so without compensation to the United States, without a mechanism for fair or competitive access to those lands, without designation of a lead federal agency with the relevant expertise, and without an oversight or regulatory program that exists for every other Congressionally authorized use of OCS lands.190
The Alliance also disagrees with the district court’s holding that the Corps does not have the authority to consider an applicant’s lack of property rights to use and occupy federal offshore lands:
[T]he Corps’ own regulations require an applicant to affirm that he has, or will acquire, the requisite property rights to undertake the activity proposed. 33 C.F.R. � 320.4(g)(6); 325.1(d)(7). In effect, the district court ruled that such an affirmation, although required, need not be truthful, and the Corps may grant the false application with impunity. Although Corps regulations provide that the Corps will not involve itself in property disputes, id., in the context of the OCS there is no possible property dispute, as federal ownership of the OCS is conclusively established as a matter of federal law. There is no possibility that the Cape Wind developers can obtain the re[*PG212]quired property rights, absent an Act of Congress. In such a case, issuance of the permit in willful disregard of the fact that property interests have not been, nor can be, obtained, violates the Administrative Procedur[e] Act . . . as arbitrary and capricious and contrary to the public interest, and will lead to unauthorized “squatting” on federal lands, based solely on a navigability permit issued with full complicity by the Corps.191
Finally, the Alliance argues that the district court’s ruling that a draft environmental assessment or finding of no significant impact need not be circulated for public comment is inconsistent with federal regulations and in direct conflict with case law precedent.192
In late March, 2004, the court granted the Corps an extension until May 12, 2004, to file its brief. The court has scheduled oral argument for June 8, 2004.193
While the case was still pending before Judge Tauro, Cape Wind’s opponents demanded that a moratorium be imposed on all offshore wind farm development until Congress enacted more comprehensive legislation.194 Other interested parties, including several non-governmental organizations, argued that the current regulatory framework was adequate, at least until a more suitable policy could be put into place.195
[*PG213] Members of the 107th and 108th Congresses introduced several bills governing the use of federal offshore resources for renewable energy projects. In February 2003, Representative Barbara Cubin (R-Wyo.) introduced House Bill 793, an act to amend the OCSLA, which currently authorizes the Secretary of the Department of the Interior to manage oil and gas exploration on the OCS.196 If enacted, House Bill 793 would have expanded the Department of the Interior’s jurisdiction, authorizing the implementing agency, the Mineral Management Service (MMS), to grant property interests, such as an easement or right-of-way, for renewable energy projects on the OCS.197
The MMS has many years of experience overseeing oil and gas activities on offshore federal lands and believes it is well-suited to take on responsibility for offshore wind energy development.198 But others disagree, arguing that the oversight of offshore renewable energy projects in the oceans should include a leading role for federal agencies with a direct marine regulatory and habitat mission, such as the Na[*PG214]tional Oceanic and Atmospheric Administration (NOAA) and the National Marine Fisheries Service.199 Dissatisfied with the provisions of House Bill 793, Representative William Delahunt (D-Mass.) proposed competing legislation in March 2003, giving authority over offshore renewable energy projects to NOAA through amendments to the Coastal Zone Management Act of 1972.200
Testifying before Congress on House Bill 793, representatives of the wind industry indicated a willingness to make fair payments to the government for easements and rights-of-way similar to those already applicable for land-based wind projects on federal property.201 They advocated for a process that would encourage developers to invest the time and financial resources necessary to identify productive wind sites, arguing against a competitive bid process for government-identified sites.202 At the same time, supporters of Cape Wind voiced their belief that it would be inherently unfair to change the rules in the middle of the game. They argued that where a developer has invested substantial time and resources, and has complied with existing permitting requirements, it should not be subject to laws and regulations that were [*PG215]not in place at the time the project was initially proposed.203 This message was not lost on certain members of Congress, as the proposed legislation evolved and morphed into yet another bill.
Proposed amendments to the OCSLA eventually made their way into comprehensive energy legislation considered by Congress in November 2003, in the form of House Bill 6, dubbed “The Energy Policy Act of 2003.” House Bill 6 was a conference report crafted under the leadership of Senator Pete Dominici (R-N.M.), Chairman of the Senate Energy and Natural Resources Committee, and Representative W.J. “Billy” Tauzin (R-La.), Chairman of the House Energy and Commerce Committee. Tucked away in House Bill 6 was a section entitled “Alternate Energy-Related Uses on the Outer Continental Shelf.”204 Although efforts to pass House Bill 6 collapsed before the measure could be voted on by the Senate, the language of section 321 provides a revealing glimpse as to Republican leaders’ latest thinking on this issue.205
Section 321 proposed amending section 8 of the OCSLA, authorizing the Secretary of the Interior to grant limited property interests on the OCS for energy-related and other purposes.206 Included in such purposes are alternative energy-related uses such as wind, solar, and ocean—tidal, wave, and thermal—energy.207 Under the proposed bill, the Secretary of the Interior, acting through MMS, would be authorized to grant a lease, easement, or right-of-way on the OCS for certain activities not otherwise authorized.208 Among other things, such activities may include those that “produce or support production, transportation, or transmission of energy from sources other [*PG216]than oil and gas . . . or . . . use, for energy-related or marine-related purposes, facilities currently or previously used for activities authorized under [the OCSLA].”209
The proposed bill provides that a developer receiving a grant of lease, right-of-way, or easement in the OCS may be required to make payments, such as fees, rentals, and bonus monies, to the federal government.210 These payments may not be assessed on the basis of throughput or production, leaving MMS to develop a formula for assessing value, such as a flat fee per acre.211 The holder of any lease, easement, or right-of-way would be required to furnish a surety bond or other form of security, and to comply with any other requirements that the Secretary of the Interior considers necessary to protect federal interests.212
While the proposed energy bill would have expanded the authority of the Department of the Interior, it would not have displaced, superseded, limited, or modified the jurisdiction, responsibility, or authority of any federal or state agency under any other federal law.213 The bill also did not specify precisely how federal agencies with concurrent jurisdiction, such as the Corps and MMS, would balance their roles.214 If enacted, the bill would likely have altered the calculus for deciding who would be the lead agency for purposes of environ[*PG217]mental impact review for projects subject to NEPA.215 In an effort to clarify the respective roles of various federal agencies, the bill mandated that the National Academy of Sciences institute a study to “assess existing Federal authorities for the development of such [renewable energy] resources . . . and . . . recommend statutory and regulatory mechanisms for such development.”216
House Bill 6 identified a number of issues that may require further regulation. These include the need to: (1) ensure safety; (2) protect the environment; (3) prevent waste; (4) conserve the natural resources of the OCS; (5) protect national security interests; and (6) protect correlative rights in the OCS.217 Although opponents of Cape Wind had called for a moratorium on wind projects until a broader federal review process could be developed, House Bill 6 would not put a halt to proposed projects while more detailed regulations were to be developed.218
Section 321 of House Bill 6 is substantially similar to House Bill 793, the bill introduced by Representative Cubin in February 2003.219 Important new language, however, was tacked on at the end of section 321 in the form of a “savings clause,” carefully crafted to address two projects already in the pipeline: Cape Wind and LIPA’s Long Island Sound proposal.220 The additional language would have applied to any project “for which offshore test facilities have been constructed before the date of enactment” or “for which a request for proposal has been issued by a public authority,”—and the projects proposed by [*PG218]Cape Wind and LIPA were the only projects to satisfy these criteria.221 Under the proposed legislation, those projects would not be required to resubmit “‘documents previously submitted’” nor obtain “‘reauthorization of actions previously authorized.’”222 In spite of this protective language, Cape Wind and LIPA arguably did not receive complete regulatory relief: while the savings clause does not require the proponents to go back to the drawing board for permits, it does not explicitly grandfather the projects from the new legislation.223
When Congress failed to pass comprehensive energy legislation in late 2003, the OCS provisions of House Bill 6 were put on hold. Senate Bill 2095, a piece of comprehensive energy legislation introduced in February, 2004, includes language identical to section 321 of House Bill 6.224 In a politically-charged presidential election year, however, regional and partisan differences may continue to derail the energy bill and its wind-related provisions. Even if Congress manages to enact energy legislation, there is no guarantee the OCS provisions, in whole or in part, will survive the legislative process. This may leave it to the court of appeals to act first, without any guidance from the legislative branch. At the time this Article went to print, the outcome of both the legislative debate and the court’s review were uncertain.
The future of offshore wind development in the United States remains unsettled. The federal Production Tax Credit, critical to wind energy’s financial feasibility, expired December 31, 2003, and has yet to be renewed, serving as a pawn in the ongoing political negotiations to enact comprehensive energy legislation. Members of Congress continue to contemplate the appropriate mechanisms and authority to regulate renewable energy projects in federal waters. While the legislative branch [*PG219]deliberates, the U.S. Court of Appeals for the First Circuit is poised to reconsider a federal district court judge’s ruling that the Corps has adequate jurisdiction to issue a section 10 permit for a data tower sited in federal waters. Unless Congress acts first, the appellate court’s decision will hold important precedence for any future litigation.
Amidst this turbulent background, the permitting process for Cape Wind’s wind farm inches forward. The Corps continues to make labored progress towards drafting an EIS, which will then be subject to public comment before it is finalized and the Corps issues a decision. After the federal, state, and regional environmental impact process is complete, Cape Wind must obtain permits from federal, state, and local authorities, opening up new avenues for opponents to challenge the project. On the state level, the Massachusetts Ocean Management Task Force has proposed a restructuring of the approach to coastal zone management. The Task Force envisions the passage of legislation—a Comprehensive Ocean Resources Management Act—that could have broad ramifications for Cape Wind, and any other project proposed in the commonwealth’s coastal zone.
The LIPA and Winergy projects are proceeding at a similarly slow pace. LIPA has yet to announce a developer and Winergy has let many of its permit applications lapse. The wind power gold rush may be slowing down, with legislative uncertainty causing America to fall further and further behind its European counterparts.
In spite of this uncertainty, the potential opportunity for offshore wind remains upbeat. Wind is currently the most cost-effective form of renewable energy eligible to achieve state mandated renewable energy portfolio standards. Wind turbine efficiencies will eventually enable wind power to compete against traditional fossil fuels without government subsidy. Advances in technology may some day allow offshore wind farms to be sited in deeper waters, minimizing aesthetic impacts. Technological improvements and better siting techniques may minimize avian impacts. Concerns regarding the environment and public health, national security, and volatile fossil fuel prices continue to sway public opinion. Sooner or later, it appears certain that the United States will harness its offshore wind resources. Yet it remains to be seen whether the nation’s first offshore wind farm will be built in Nantucket Sound, off the south shore of Long Island, along the coast of Virginia, or somewhere else along the thousands of miles of U.S. coastline.