Federal offshore wind leases may help New Jersey become a leader in renewable energy after four years of halting efforts at the state level, but many bureaucratic and legal entanglements remain.
Under the Bureau of Ocean Energy Management, or BOEM, two leases across nearly 344,000 acres about 7 miles off Atlantic City would be auctioned and developed. Actually getting the energy back to shore and to consumers, however, would require a long approval process through federal and state agencies.
“The federal government has upheld its end of the deal,” said Doug O’Malley, director of Environment New Jersey. “Now the pressure is really ratcheted up on the Christie administration to finally comply with their own law.”
Environmental groups and wind developers had initially bet that the state process would move far more efficiently than the federal one. Those hopes have flagged since 2010, when Gov. Chris Christie signed legislation that would have positioned the state as a hub for the new industry, with a port on the Delaware River for the development of turbines and an annual goal of generating 1,100 megawatts of wind energy.
Today, a 25-megawatt project 3 miles off Atlantic City is engaged in a legal battle with the state Board of Public Utilities; two other state projects have languished; and the Paulsboro Marine Terminal still doesn’t have any wind-related tenants.
Chief Operating Officer Paul Gallagher said Fishermen’s Energy plans to simultaneously pursue its project in state waters and the federal lease. Even with the BPU’s rejection of the former project – due, in part, to the perceived costs to ratepayers – Gallagher said he’s confident the state appeals court will decide in his company’s favor.
In May, after the BPU’s decision, the Cape May firm was one of two projects to receive $47 million from the U.S. Department of Energy. The hope, Gallagher said, is to use that money for the smaller $200 million project in state waters before embarking on what could be a $2 billion investment in federal territory.
“We would’ve hoped to have been finally approved and, if not completed, then in the process of constructing the Atlantic City project by now,” he said. “I just think it’d make a lot more sense to build the smaller project first.”
Regardless of what happens in the courts, Gallagher said, Fishermen’s Energy is actively pursuing federal leases off New Jersey and other states. And if the appeals court overturns the BPU’s decision, he said, the Atlantic City project could commence immediately.
The stakes are high, as the National Renewable Energy Laboratory estimates New Jersey could generate an estimated 3,400 megawatts – or enough to power about 1.2 million homes – of electricity from the federal wind-energy areas.
Such projects could bring construction, maintenance and manufacturing jobs to South Jersey at a time when one of its lifebloods, the casino industry, is faltering. The possible closings of four Atlantic City casinos this year alone could cost the region 7,800 jobs.
Wind projects, Gallagher said, “won’t replace jobs one-for-one, but I think it’s important for Atlantic City to take advantage of every opportunity for development that’s available. This is one that’s ready and waiting off Atlantic City.”
Even as wind projects off New Jersey have languished, others in neighboring states are moving ahead.
Besides smaller loans, such as the one Fishermen’s Energy received, the federal government committed an additional $150 million to the 468-megawatt Cape Wind project off Massachusetts. Cape Wind and a smaller project off Rhode Island have secured most of the power contracts and permits required and have announced plans to begin construction in 2015. Meanwhile, the BOEM is also seeking developers for leases off Massachusetts, New York, North Carolina and Rhode Island – roughly 1.5 million acres in total.
Spokeswoman Tracey Moriarty said the multiyear process in New Jersey began in 2011, when 11 companies responded to the BOEM’s initial call for interest in 2011.
Companies that wish to participate in the lease sale are required to submit a qualification package by Sept. 19, in advance of the announcement of a final sale date. Moriarty said the winners of the auction will have a year to submit a site assessment – in which they survey the area and gather wind data – and an additional 4½ years to submit a construction and operations plan for review.
But the BOEM isn’t the only entity that will be involved in the approval process.
“We can give the lease, and, once we do an extensive environmental process, we have the authority to approve the project,” she said. “That company would have to work with the state in transmitting the energy to shore.”
That’s where the BPU – which has twice rejected Fishermen’s Energy’s proposal to sell wind energy onto the grid – would come in.
O’Malley said the BPU’s decision is the “linchpin.”
“Once the Board of Public Utilities proposes an offshore wind program, it will provide necessary certainty for investors and offshore wind companies to really pour it on for offshore wind,” he said. “It’s an uncertain environment.”
But the long federal lease process could have one positive. By the time the larger federal projects make it to the BPU, O’Malley said, the political landscape in New Jersey will likely have changed.
“Christie is not going to run for life, so the potential for offshore wind will be there a lot longer than Chris Christie is governor,” he said.
Christie, for his part, has never publicly withdrawn support for wind energy. Representatives from the Governor’s Office did not respond to a request for comment.
But, even among supporters, there’s not complete agreement about the effect of major offshore wind development.
Cindy Zipf, executive director of Clean Ocean Action, said she’s concerned about how large-scale wind farms could affect migrating sea life and any potential contaminants used in their operation and maintenance. The planning should also account for logistical issues, she said, such as how to protect turbines during hurricanes and northeasters.
“I know New Jersey and many areas try to run before they walk,” she said. “When you’re dealing with something as unpredictable as the ocean, it’s a big challenge; (the state) does not have a lot of experience with that.”
Moriarty, of the BOEM, said the process includes an environmental review that examines those kinds of issues, as well as extensive opportunities for public comment.
“The project is in federal waters, but it does affect local communities, as well,” Moriarty said. “We’re cognizant of that, and we want to hear from them.”
Public comments will also be taken in advance of the lease auction through Sept. 19. The BOEM is holding a public seminar Wednesday to explain the auction process and answer questions from the potential bidders and the public.
O’Malley said offshore wind is critical because of the larger ecological challenges looming over the horizon.
“If we’re serious about fighting climate change, we need to be doubling down on offshore wind,” he said.
Gallagher, formerly the vice president of the Atlantic County Utilities Authority, said he’s optimistic about the future of offshore wind energy.
“People thought I was crazy when I tried to build a wind farm at the ACUA” in Atlantic City, he said. “It gives me great pride to look out the window from Pacific Avenue and see it operating. Hopefully, I’ll be able to look out and see them on the other side of the street.”