By David Keene - 05/02/06 12:00 AM EDT
Congress is about to decide whether a developer whom the Senate last year handed the exclusive right to build a 24-square-mile array of 417-foot-high windmills in the middle of the Nantucket Sound — off Cape Cod, Martha’s Vineyard and Nantucket — should be allowed to proceed.
The area’s most famous resident, Sen. Teddy Kennedy (D-Mass.), has teamed up with Alaska’s Sen. Ted Stevens and Rep. Don Young, both Republicans, to stop it. They’re catching a lot of flak for doing so, but, while it doesn’t happen often, I am forced to the conclusion that this time Kennedy may be right.
It is tempting to dismiss Kennedy’s opposition to the windmills as just another example of liberal hypocrisy. He and his neighbors may well be motivated mainly by the thought of anything so tacky being built in their back yards and haven’t expressed much concern with similar projects in other peoples’ neighborhoods. Indeed, Kennedy’s consistent opposition to oil exploration and nuclear power has diverted scarce resources to the development of dozens of even more exotic alternative-energy schemes over the years.
On the other hand, while I’ve never opposed people tilting at or even building windmills on their own time and using their own money, I’m continually appalled by the billions of dollars politicians have wrung from taxpayers for such schemes.
And it turns out that this one could cost taxpayers plenty. So if Kennedy and his buddies kill it, they’ll be doing all of us a favor and in the process could experience a “teaching moment” that might just convince them it’s time to rethink some of their long-held positions.
Cape Wind, the brainchild of Massachusetts millionaire Jim Gordon, will cost over a billion dollars to build, produce an average of 170 megawatts of electricity, or barely 1 percent of New England’s electricity needs, and, if everything goes right, save the average consumer as much as a dime a month.
However, since he will build it in the middle of the area’s most fertile fishing grounds and smack up against extremely busy shipping lanes, it will deprive commercial fishermen of their livelihood, create real hazards to sport and commercial vessels transiting the area, disrupt the radar on which the thousands of aircraft that pass through the area depend and, oh yes, ruin the view from the Kennedy compound.
Now if there were no other way to produce additional energy the risks inherent in this project might be worth taking. But there are alternatives. For example, The Washington Post estimates the cost of a 1,000-megawatt nuclear plant at $1.5 billion to $2 billion. That’s a lot of money, but it doesn’t seem like much when compared to the cost of Mr. Gordon’s windmills.
It’s going to cost $4 million to $7 million per megawatt of electricity output to erect the Cape Wind behemoths, while a nuclear plant would cost $1.5 million to $2 million per megawatt to build. Maybe I don’t get it, but it seems to me that the nuclear plant makes more sense, since both wind and nuclear plants are fairly inexpensive to run once they’re built.
Given this comparison, one has to wonder why the developer is so insistent on going forward with so expensive and risky a scheme opposed not just by Kennedy but by virtually every politician, industry and interest group in the area, regardless of party or ideology. Indeed, the only local or regional figure who isn’t against it is Sen. John Kerry (D-Mass.), who typically can’t make up his mind.
The answer is that the developer can ignore the economics because he will make his money through federal subsidies, tax breaks, credits and other benefits available to “alternative” energy producers. Based on his original cost calculations, for example, Cape Wind will garner him $28 million a year in direct subsidies for 10 years, along with $40 million a year in what are called green energy credits that can actually be sold on the open market. On top of all that, the entire investment can be written off over just five years.
So while the project may not do much for area consumers it will work for the developer for the same reason a lot of similar projects that look silly work — because Cape Wind is in the business of generating subsidies, tax credits and tax write-offs, rather than electricity.
Mr. Gordon’s company is privately held, so we don’t know how many folks he’ll have to split the booty with if his project is ever completed, but you can bet he’ll have enough left over to buy a mansion that’ll put Teddy’s to shame.
And, he’ll have a better view.
Keene, chairman of the American Conservative Union, is a managing associate with Carmen Group, a D.C.-based governmental-affairs firm (www.carmengrouplobbying.com).