Jeff Grybowksi likes to tell the story about the whale. In it, he – Grybowski, not the whale – sits ashore with a cell phone, anxiously wishing the mammal away from the ongoing construction of his $300 million offshore wind farm. It’s the first project like this to be built in U.S. waters and it took a lot of lobbying, political muscle, and money to get it here. On that day, in 2015, about three miles southeast of Block Island, Rhode Island, the whale was screwing things up. The humpback had veered close to Grybowski’s crews, who were sinking steel piles into the ocean floor. By law, it’s illegal to “harass” endangered and at-risk marine mammals; Grybowski’s pile driving, emitting some 220 decibels (as loud as a space shuttle taking off), would definitely cross the line.
As CEO of Deepwater Wind, Grybowski was worried – not just for the whale but also for his investors. If the whale didn’t budge, the project might not be able to move forward until the following spring, costing millions of dollars in delays. Deepwater was obliged to stop construction during the whales’ migration, and that day was the last chance to sink the last pile for the five turbines Grybowski was erecting to power the tiny island with carbon-free electricity. If delayed, he would have to wait six months to finish up.
After a few fretful hours of back and forth with his construction manager, who had halted work in deference to the leviathan, Grybowski finally received word that the whale had moved on. His crew sank the final piling, making its deadline at no cost to man or beast.
For Grybowksi and his surrogates, as well as for the powerful environmental groups blowing wind into his green-energy sails, this is a handy anecdote, one they frequently recycle to journalists and policy makers. In the face of commercial fishermen’s warnings that Deepwater’s wind farms will kill their industry, Grybowksi’s parable portrays the company as a true steward of the environment. At the same time, the story underscores the brinksmanship that has propelled Grybowski’s company from startup obscurity to leading player in the booming domestic offshore wind trade: They are ready to go down to the wire for the sake of their hedge-fund investors.
But whatever Grybowksi’s whale tale really means, you won’t hear him tell it to The Independent: Deepwater’s reps would not make him available for comment on this story. And who can blame them, really? Because as anyone out on the East End knows, Grybowski and Co. have spent the past two years battling headwinds in the form of local opposition to their next proposed wind farm, a 15-turbine array set in a 256-square mile federally leased parcel about 30 miles off Montauk. The project promises to deliver up to 90 megawatts of clean electricity to the South Fork – enough to power 50,000 average homes. As Grybowski put it in a press release when the project was approved: “There is a huge clean energy resource blowing off of our coastline just over the horizon, and it is time to tap into this unlimited resource to power our communities.”
But not everyone out here is impressed by Deepwater’s plans, or by Grybowski, or his whale. “The only thing green about this project is the money that’s going to end up in a bunch of hedge funders’ pockets,” says Bonnie Brady, executive director of the Long Island Commercial Fishing Association, who has been battling the plan since it was announced in July of 2016. “We don’t know what these windmills, or their high-powered transmission lines, will do to our fish. All we’re asking is, let’s take time to do this right, not rush it.”
It’s not that people around here don’t understand the need for clean energy; at least in theory, it’s hard not to love renewables. But beyond the local commercial fishermen understandably worried about their livelihoods, there is a vocal band of activists – among them local energy experts, financial consultants, and accountants – who question the economics of the deal, and the lack of public transparency into exactly how it was made.
Deepwater’s contract with the Long Island Power Authority requires the utility to buy all of the wind farm’s energy output for 20 years. The total cost of the project, which includes two 5-megawatt battery storage projects and a contract to remotely turn down customer ACs and other appliances during peak demand, is $1.6 billion. LIPA has said that ratepayers will see their energy rates rise from 7.5 cents per kilowatt hour to about 16 cents, with the average homeowner facing a $1.19 per month increase. When so-called soft costs such as distribution, transmission upgrades, and battery storage are added in, the hike is closer to $2.50 per month.
That may not sound like much, and plenty of people worried about climate change are more than willing to pitch in and pay their share for a cooler planet, but that increase could severely affect commercial electric bills. Bill Valenti expects the bill at his sprawling Multi Aquaculture Systems fish hatchery in Amagansett to double from its current $3000 a month. “That will drive me out of business,” he says.
In addition, neither LIPA nor Deepwater will release the specific financial terms in their contract, so there’s no way for the public to assess what exactly has been agreed to. Under the “Confidentiality” clause of the contract (which The Independent obtained from LIPA in a version redacting all financial information), it notes that both parties agree that the disclosure of “rate, cost, financial, and other economic and material terms…would cause substantial injury to the competitive position of both.” It also notes that because LIPA is required under New York State’s Freedom of Information Law to release certain confidential information to the public, that Deepwater reserves the right to review that information in advance and then “seek a protective order” against releasing it.
“Without knowing the most basic premise of any deal,” Si Kinsella, former chairman of the Wainscott Citizens’ Advisory Committee, told East Hampton town officials at a public hearing in May, “we are making decisions blindfolded.”
It might seem difficult to understand why so many large, powerful forces – hugely rich hedge funds, massive national environmental groups, even the New York Governor’s office – are focused on the East End. But the outline of one possible long-term plan does make sense of it all: Since 2010, the Federal Bureau of Ocean Management has auctioned off 12 leases to energy companies that plan to erect as many as 1200 turbines in 1.4 million acres of Atlantic Ocean, from Massachusetts to North Carolina, with South Carolina coming later this year and others soon afterward. In other words, Deepwater’s South Fork Wind Farm, as it’s formally known, is just one parcel in an industrial-scale power plant that will run up and down the Atlantic’s continental shelf.
That’s a vision that suits not only a for-profit developer like Deepwater and its hedge-fund majority-stake owner, D.E. Shaw, but also the national green energy agenda of major environmental organizations like the Sierra Club, the Natural Resources Defense Council, and even Governor Andrew Cuomo, who has mandated that the state generate 2.4 gigawatts of offshore power by 2030.
The only missing link to making this master plan a reality has been finding a place for the power to come ashore, a process that’s been stymied by communities up and down the coast questioning and challenging the offshore wind developers’ plans. For its part, Deepwater initially said it wanted run its 60-mile long extension cable around the South Fork and land it through the bay. But the community there – longtime baymen as well as weekend sailors and yacht club members – opposed it. Deepwater eventually set its sights on Wainscott, where it needs an easement to land its cable and bury it beneath public roads. If it’s rejected there, the company has a Plan C: state-owned land at Hither Hills, which would allow it to completely bypass town approvals.
But Grybowski and Co. are running out of time. Deepwater has repeatedly said it needed the easement by the end of June in order to meet contact deadlines. Not only that, it needs to start the project by a certain date in order to qualify for a federal tax credit worth $170 million. As Clint Plummer, its vice president of development, told The Independent this past spring, “I don’t want to draw a red line in the sand, but we need to meet permitting deadlines.” The company, says Plummer, has already spent “hundreds of thousands of dollars” to survey this route. Moving it would cost hundreds of thousands of dollars more.
In mid July, despite opposition, the East Hampton Town Board, which includes Wainscott, signaled its “support” for granting Deepwater its easement – and accepting the company’s nearly $8.5 million community compensation package. But it didn’t actually grant the easement. Instead, it punted to an outside attorney to review, draw up an agreement, and open that up for final public review.
That means Deepwater remains at a standstill and that there’s still time to ask questions, and for East Enders to look into the full extent of the project, the company building it, and the eventual cost to ratepayers. And while they look, locals are starting to see a larger debate happening along the East Coast over the potential impacts of this nascent offshore wind industry on the environment and on their generations-old fishing communities.
Here on Long Island, if Deepwater’s project does get built, and its cable is plugged in to the LIPA substation at East Hampton’s Cove Hollow Road, people fear the town could become just one transfer node in a wind-driven power plant spanning hundreds of miles. And maybe that Blade Runner-like future is inevitable – necessary, even – if the worst effects of climate change are to be avoided. But if that’s the real play here, shouldn’t the locals know it? As one woman put it this past spring in a fiery, applause-inducing speech at a contentious community board meeting on the project: “Are we going to see the Hamptons, once a playground for the wealthy, turn into a playground for the utilities?”
On a bright Saturday morning in June, Dan Farnham stands on the commercial dock in Montauk. A 28-year-old college graduate with a degree in economics, and a second generation fisherman, he is overseeing restoration work on the Kimberly, a long-line commercial fishing vessel that in two days will head back to open ocean for a week-long stretch of catching tilefish.
The Kimberly, one of three vessels that Farnham and his father, Dan Sr., co-own with their captains, can hold up to 24,000 pounds of fish. But father and son fear their little fleet’s holds, just a small part of a $16 million commercial industry around here, could get harder to fill thanks to Deepwater.
The Farnhams and others worry that the process of installing the turbines offshore, including the plowing of a 60-mile long trench in the sea floor to accommodate the electric cable needed to bring power from turbines to the beach, will devastate marine life and destroy their business.
They know that some wind farms in Europe, which have been operating for more than a decade, have altered the seafloor and the tides. Satellite images from NASA have shown that wind farms in the North Sea, where more than 40 percent of the world’s offshore wind power originates, have created underwater sediment plumes measuring up to 500 feet wide by several miles long, sweeping around daily as the tide reverses direction. European fishermen have reported that the farms have driven off cod and whiting fisheries. And there remain the unknown effects of the constant churn of the enormous windmill blades, which can be as long as a football field.
“The truth is they’re going to start industrializing the ocean and no one knows what that’s going to do to migration, spawning habitats, or marine life populations,” says Farnham.
Deepwater did hire consultants to sift through scientific literature on impacts of offshore windmill farms on marine life. The company concedes that pile driving and jet-plowing could affect certain marine life. But not, it insists, very seriously and not for very long. As for the electromagnetic field that will emanate from their 60-mile long cable, which will carry a 138-kilovolt, high voltage current, and which critics liken to a giant dog fence, they say that such cables have shown no adverse impact on lab fish. “If you were standing directly above the cable, it’s roughly comparable to a household appliance,” says Plummer, Deepwater’s face at many community meetings.
However, while electrical fields can be contained by a cable’s insulated sheathing, magnetic fields are not easily subdued. According to the Pacific Northwest National Laboratory, whose research arm supports the U.S. Department of Energy’s office for wind and wave energy technologies, EMFs from underwater cables are thought to “potentially cause changes in behavior, migratory navigation, development rate, and reproductive success” in marine life. Organisms at high risk include sharks, skates, and rays, some finfish, including sturgeon and eels, and sea turtles.
The experience of Europe, which has pioneered offshore wind power, provides at least some insight into the effects of industrial scale offshore wind. But even after a decade of operation there, a great deal remains unknown about the effects of offshore wind on the environment. Besides, most of Europe’s offshore windmills sit in relatively shallow water, disturbing mostly potters, or lobstermen, not ocean fisheries; in the U.S, wind power companies have sited their projects in deep water that’s rich in marine life.
Even the Bureau of Ocean Energy Management, which oversees the offshore leases, has raised concerns. In a 2017 report it cautioned that major fishing ports in Massachusetts, Rhode Island, and New Jersey are most exposed to potential impacts and loss of revenue. In particular, it said, the sea scalloping grounds lying within the wind farm areas could be hard hit. BOEM also warned energy companies to be careful when siting their turbines off southern New England because of the area’s winter flounder spawning grounds. While BOEM has conducted environmental surveys of the lease areas, and has asked fishermen for input, it is waiting on the energy companies to submit their construction operation plans before conducting formal environmental impact studies.
Critics of Deepwater’s consultants’ report argue that its scientific findings are cherry picked, that none of the studies cited was peer reviewed (the gold standard in scientific research), and that the research is not site-specific to their fishing grounds. In effect, the critics say, the developer got what it paid for. “I wouldn’t rely on any science they or their associates put out,” says Dr. Carl Safina, a nationally known marine science professor at Stony Brook University. “It’s obviously a conflict of interest for both of them.”
Safina points to large-scale studies in Europe on windmill blade strikes that have killed an untold number of sea birds (bird conservation groups have sued to stop offshore wind projects in Great Britain and the North Sea). Europe’s fishermen have reported that cod and whiting fisheries have disappeared. “It’s a terrible thing when environmentalists, who have been calling for clean and renewable energy, find these new things create new problems,” says Safina. “But giant industrial scale projects will do that.”
Rachel Gruzen, a local environmental consultant who holds a doctorate from Yale, and has been a critic of what she calls Deepwater’s “lack of transparency,” says her community “is asking for a deeper dive” into the project’s design. “Before you build the infrastructure we want to understand the infrastructure and the worst case scenarios,” she says. “Instead we’re given blanket statements by the developer about this causing zero environmental impact. At least Rhode Island asked for and got two years of science.”
What Rhode Island actually got, in advance of Deepwater’s Block Island project, was something called the Ocean Special Area Management Plan, a set of regulations for managing and protecting ocean resources and activities. Scientists from the University of Rhode Island drew up a list of potential drawbacks from an offshore wind farm. Among them: the loss of access to fishing grounds, decreased catchability of fish during construction and operation, changes in species abundance and distribution, disturbance of fish from noise or EMF, loss of commercial fishing gear, and maritime collision with the turbine bases. In cases where bad stuff did happen to the fish or a fisherman, the plan called for mitigation – money to buy up worthless fishing licenses and repair broken gear, or reimburse fisherman for lost days, among other things.
The Block Island Wind Farm has now been in operation for about 19 months. While it’s too soon to know whether its turbines will have long-term effects on local marine life, it has certainly adversely affected commercial trawlers. In community forums during the run-up to the project, Deepwater officials had explained that in some areas, the ocean floor would be too hard to bury its in-shore cable or the inter-array cables that connect the turbines to each other; instead, it said it planned to secure the cable to the ocean floor by laying one or two concrete slabs or “mattresses” over them.
Deepwater did not respond to questions about how many slabs it ultimately installed, or how large they are, but it’s been reported that the company laid 49 of them. The result: nearly a dozen trawlers say they have been dangerously hung up when their bottom-dragging nets caught on the mats.
To compensate for just such a problem, the state had required Deepwater to set up a contingency fund for fishermen whose gear might be damaged and who might lose days of work as a result. But when draggers like Joel Hovanesian, who works out of nearby Point Judith and whose 40-foot boat, Defiance, went to report his claim after getting hung up on a mattress on August 9, 2017, he was met, he says, by stalling and low-balling.
Deepwater had developed the sea-to-shore cable with National Grid, a regional utility. Deepwater’s fisheries liaison told Hovanesian his beef was now with the utility, which had acquired the rights to the cable, says Plummer. At first, Hovanesian says the utility insisted it was not responsible and that his $6600 claim (for the damage and 10 lost work days) would not be paid. After many phone calls, it relented, offering him, he says, 50 cents on the dollar and requiring him to sign a non-disclosure agreement.
“I said ‘Hell no, that’s not gonna happen,’” says Hovanesian. He then hired a lawyer, called his local senator, and “lo and behold” this past June they paid him the full amount, no NDA required. Others have not been so lucky. Hovanesian offered the names of three other trawler captains who also filed claims and who received only half their claim amount and signed the NDA. (None would go on record because of those agreements, but confirmed the gist of his accounts. Deepwater, on the other hand, has disputed that the mats have caused any damage or lost income.)
Dan Farnham doesn’t want the same thing to happen to his community. He’s also worried for his safety. He has yet to receive assurances that the turbines will be set in such a way that they are navigable and don’t pose a hazard during normal days or, worse, during storms or hurricanes when fishermen are forced to steer around or through them in high winds and 30-foot waves.
“We’re out working in that kind of weather,” says Farnham, as one sleek fiberglass yacht after another glides past the rusting commercial hulks creaking at the Montauk dock. “That’s what people don’t realize. When storms are blowing and they’re in their homes in October, with a little space heater running on green energy from out there, we’re the ones who are out there risking our lives trying to avoid these things.”
A few years ago, offshore wind was dead in the water. The infamous Cape Wind project, which would have put 130 turbines in the waters of Nantucket Sound, off Cape Cod, died because of NIMBY pressure from Senator Ted Kennedy and fossil fuel baron William Koch, who didn’t want their oceanfront views spoiled by 440-foot high turbine blades. Back then, federal auctions for ocean plot leases for wind farms were lackluster at best. Even so, some far-sighted hedge funders were convinced the tide would one day turn, thanks to technological efficiencies and the promise of hundreds of millions of dollars in federal tax credits.
One of those visionaries was Bryan Martin, head of renewable energy investments for D.E. Shaw, the $47 billion Manhattan-based hedge fund that owns Deepwater. A former partner at J.P. Morgan’s private equity unit, Martin had spent years working with oil and gas exploration companies and in the oil tanking and oil field services industry. By 2007, he had recalibrated his attention toward renewables and, that year, to a fledgling New Jersey wind-energy outfit that had yet to put up a single turbine, on shore or off.
Martin had seen that the electrical bottlenecks around Long Island and coastal New England left them badly in need of new energy sources. Those areas could not easily build new fossil-fuel plants or utility-scale solar (which eats up land) or on-shore wind (an eyesore). So he scooped up the little outfit that became Deepwater Wind. Then, while casting around for a flagship project and the political allies who could help him get it built, he found both in the tiny state of Rhode Island.
Around that time, Jeff Grybowski was chief of staff for Rhode Island’s governor, Don Carcieri, who had begun pushing legislators to back wind power to expand the state’s energy portfolio. When the state opened bidding in 2008 for a wind farm site off Block Island, which had for years relied on dirty diesel generators for power, Deepwater called Grybowski, then in private law practice, to help land the deal. “We brought in Jeff because he was well connected politically,” Bill Moore, Deepwater’s CEO around the time, told The Independent. After going up against six other companies, Team Grybowski won the project.
Once it had locked in a government-mandated project, Deepwater was in a strong – some say one-sided – position to negotiate its power purchase agreement with National Grid. To many, it seemed like a sweetheart deal with no downside for the developer. It required the utility to pay 24.4 cents per kilowatt hour for all the power the wind farm could churn out over 20 years. That’s twice the wholesale price National Grid had been paying for electricity. The contract also contains a built-in price escalator of 3.5 percent per year.
Today, Moore admits the project was “heavily subsidized by ratepayers.” But as the first of its kind in the nation – and one requiring a $100,000-a-day specialized ship to install the turbines – it was meant, he says, to “open the doors” to more projects. Plus, he says, Carcieri and the legislature “wanted it to happen and were willing to subsidize it.”
But the state’s Public Utilities Commission was not. In 2010, it rejected the contract, noting it was not “commercially reasonable.” Determined to see steel in the water, the governor and assembly passed a statute instructing the PUC to look again and stop considering its high cost. The three-member panel then approved a revised contract, 2-1.
Outraged, State Attorney General Patrick Lynch labeled it an “inside deal” that “will force us to buy overpriced electricity for the next 20 years in order to subsidize one company.” He and several commercial ratepayers appealed the decision to the state Supreme Court. In 2014, after a lengthy review, the court reluctantly affirmed the contract, writing in its decision that it viewed the Assembly’s “unwavering quest” to execute the project “with trepidation.” Yet it yielded to the Assembly’s role as lawmaker. In other words, it didn’t smell right, but since the public had elected these people, what are you gonna do?
Bill Moore, and Deepwater, are unapologetic about the Block Island deal. Because, they believe, that’s what it’s going to take to get us to a green energy future. They note, with understandable pride, that Block Island, which once relied on 1 million gallons of diesel fuel a year to run its generators, has eliminated some 40,000 tons a year of greenhouse-causing carbon emissions. “Block Island was a one-off and a stepping stone,” says Moore. “That contract I signed in 2010, that would not have happened without some deep pockets involved.”
On a clear night in late May, more than 100 people have crowded into the hangar-size studio of LTV, East Hampton’s public access TV station on Industrial Road. The room, which hosts lectures, cooking shows, and garage-rock bands, is painted black and dominated by folding chairs and stage lights. The mood is buoyant, like at a political rally.
Middle-aged locals in jeans and fleece carry signs denouncing the Deepwater project. They stand mingling and joking in the aisles. A few young people in crisp blue oxfords, wearing Wind Worker nametags, sit erect in their seats. They are mostly outreach workers for the Sierra Club and the World Wildlife Federation. When approached by locals, they talk in eager tones, like missionaries proselytizing to a group of animists.
The pro-wind forces are deeply worried about the global climate crisis, about Long Island’s vulnerability to rising seas and storm surges, and they see a way forward with wind power, despite concerns about what it might do to the ocean. “Look at the impacts of fossil fuels on marine wildlife, birds, fisheries, the acidification of the oceans, and what it’s doing to the critters we love so much,” says Lisa Dix, the senior representative in New York for the Sierra Club’s Beyond Coal advocacy campaign. “We don’t have the time to slow down and wait.”
Tonight’s gathering is the first joint meeting on the project between the town board and the Trustees, the town’s oldest elected body. (Dating to the colonial era, the group today owns – in trust for the public – most of the town’s beaches, bays, and ponds.) This is also the first chance for the public to have its say on the Deepwater project, setting the stage for, and possibly influencing, the board’s future vote. Some 50 people have signed up to speak; nearly all, with the exception of the blue shirts and a few others, are soundly against the project.
Among the most contentious questions asked that evening: why did LIPA, with dozens of power-producing projects to choose from, choose only one? Energy experts agree a resilient grid is a decentralized one in which renewables like solar and wind play a mutually reinforcing role. Choosing a single wind power project puts you at the mercy of…the wind. “There will be several days in a row when there will be no electricity coming from that offshore wind farm,” says Tom Bjurlof, an energy consultant who lives in Port Jefferson. For those days, and many light-wind days like them, LIPA will have to rely on a few backup batteries and its current crop of fossil-fuel-fired plants – and possibly build new ones, precisely what it was trying to avoid.
One problem is that the entire East End sits in what’s called a load pocket. That’s an area that can’t provide its own power and where there isn’t enough transmission capacity, in this case from up Island, to supply 100 percent of the power 100 percent of the time. The grid here was built to serve smaller homes and fewer commercial properties; of course, all that has changed – and with it, so have the area’s power needs.
When LIPA requested proposals for energy projects in 2015, to meet what it called peak load demands on the South Fork, energy consumption was growing at 2.5 percent a year and the utility estimated that the need could max out the grid’s capacity by 2022. At the time, LIPA said it was looking to avoid transmission upgrades to the grid. But this past June it confirmed that it was planning to build a new 138 kilovolt underground cable from LIPA’s Canal Substation in Southampton to an as-yet-unbuilt new substation in Wainscott, as part of a half billion dollar transmission upgrade.
A spokesman for the utility calls the substation an “if and when” issue, meaning it might be needed to support future load growth, which the utility reckons will be about eight years from now, in 2026. That means it is possible the Deepwater wind farm would no longer even be needed by then.
“Why do you need this wind farm, for a few Fridays and Saturdays of peak power in August, when the grid can be backed up at any time?” Bjurlof said after the meeting. “There are ways to do this so you don’t have to spend twice. Look at the Danes and the Germans. They don’t run into load pockets. People talk about how great wind is. Yeah, it’s great when you design the system right. But this is just a terrible idea. It’s a design problem.”
One solution is to decentralize the design, to put up a distributed system of rooftop solar farms, land-based windmills, mandated solar awnings and roofs, and so forth. The obstacle to that plan, says Bjurlof and other critics, is not so much the NIMBY opposition and a lack of real estate, but that utilities like LIPA make their money distributing electricity and require a monopoly system to keep the money flowing. A single large industrial power plant, even one that sits on the water and runs on wind power, allows LIPA to keep competition at bay and keep rate payers, who get little to no say in the matter, on the hook. Says Bjurlof, “Clever games are being played here.”
Back in 2012, two years before Jeff Grybowski’s political allies had subdued the Rhode Island state Supreme Court, billboard messages began appearing around LIPA headquarters in Uniondale. Paid for by the Sierra Club, the hot-applied vinyl bore a singular message – “Let’s Turn, Not Burn” – along with contrasting images of clean white windmill blades against endless blues skies and filthy belching smoke stacks against a menacing black horizon. “Offshore wind is an incredible piece of the renewable energy pie,” says the Sierra Club’s Lisa Dix today. “And we’re not going to reach our clean energy goals without out it.”
Around that time, LIPA was looking to renew long-term energy contracts, and was already assessing several new projects, including a proposal from Deepwater. By this time, the company had elevated Grybowski to CEO, after Moore departed to start a solar venture. And while Deepwater has insisted the company had nothing to do with the billboards, which were part of a $10,000 multi-media campaign, they certainly sent a helpful message to LIPA staffers, the public, and their political representatives. Over the next few years, LIPA would review dozens of energy projects.
It would be naïve to think that Deepwater’s political ties, lobbying efforts, and support from green groups, like the Sierra Club and National Resources Defense Council, didn’t help push its projects onto LIPA’s short list. That is how the American system works these days, like it or not. And while green energy projects are inevitably sold as a solution to the mounting carbon crisis, it’s often not clear to consumers – even those who care about global warming and are willing to make sacrifices – that in almost all cases, those projects are commercial ventures.
“Everyone thinks this green energy company is just your friendly neighborhood person trying to save the planet,” says Farnham, the Montauk fisherman who has spent two years meeting with Deepwater representatives over his concerns about threats to the local fishery. “No. This is a large energy company owned by a hedge fund and they are in it for the profit.”
In fact, the entire green energy-industrial complex is starting to look a lot like other powerful industries (see: Wall Street), with a revolving door of corporate executives, state officials, and lobbyists. For instance, Katherine Kennedy, the NRDC’s director of transportation and energy, led the state attorney general’s environmental protection bureau under Cuomo from 2007 to 2009.
As Newsday’s Mark Harrington first reported, Kennedy urged LIPA, in a 2014 blog post leading up to a LIPA bidding round, to “include Deepwater One on the short list for a renewable energy contract.” That nudge certainly serves the interests of her old boss, Governor Cuomo, who has since mandated a major increase in wind power for the state. It also serves the interests of one of NRDC’s board members, Max Stone, who is a managing director at D.E. Shaw, the hedge fund that owns Deepwater. Meanwhile, the fund’s founder, David E. Shaw, has given $38,000 to Cuomo’s political campaigns.
And Hillspire LLC, the wealth management firm owned by the family of Eric Schmidt, Google’s former executive chairman, holds a 20-percent stake in D.E. Shaw—and the Schmidt Family Foundation, which supports sustainability, gave the NRDC a $1 million a year in grant money between 2006 and 2011. Google also happens to be one of the companies that has advocated for, and invested millions of dollars in, a continuous wind-powered electrical backbone off the coast called the Atlantic Wind Connection project.
Then there are Deepwater’s lobbyists, Tonio Burgos & Associates, which have lobbied, among other entities, the New York State Senate, Assembly, and LIPA on Deepwater’s behalf. The company’s namesake founder served as appointments secretary in the administration of the governor’s father, Mario. Burgos has given $80,000 to Andrew Cuomo’s campaigns and his firm has given $140,000. And Burgos’ staff includes Kristen Walsh, who served as Long Island representative for Senator Kirsten Gillibrand. It’s a small world.
The NRDC’s Kennedy tells The Independent that the group will work with any developer that wants clean energy. But, she adds, “the NRDC does not take money from any energy developer, I want to make that clear.” In order to win its support, a project like Deepwater’s has to be sited properly, have environmental reviews, and “minimize conflicts” with stakeholders, she says.
In July 2016, having faced off against 21 other proposals to supply energy to the South Fork – including projects for natural gas plants, fuel cells, and solar arrays – Deepwater sailed to victory. “For anyone who is on the side of sustainability this should be a triumph,” Clint Plummer of Deepwater told the Independent. “For the first time an offshore wind farm competed head to head with other resources and won.” In fact, no one really knows if Deepwater’s bid was the cheapest, because the company and LIPA have refused to make the terms of the contract public.
I’ve always maintained that this is not about these stupid windmills at all. It’s about the grid,” says Bonnie Brady. It’s lunchtime on a Friday in early June. Brady, a 55-year-old with unruly hippie hair held back by a green visor, and who favors fanny packs to accessorize her neon-accented running shorts, sits at a high table in the bar area of Inlet Seafood. The room is all wood, brass, and postcard views of Lake Montauk. “This is nothing but a place for Deepwater to plug in the cord to a vast power plant,” Brady says.
Deepwater’s has said its ocean plot can hold up to 200 turbines. In May and June, the company won two more contracts, this time to provide Rhode Island with 400 megawatts of power and Connecticut with 200 megawatts from the same zone. Deepwater has said the Connecticut project, called Revolution Wind, would be paired with “a first-of-its-kind offshore transmission backbone” developed with National Grid Ventures. This system, it noted, “would support not just Revolution Wind, but also future offshore wind farms in the region, even if they’re built by our competitors.” The implications of this plan are as enormous as its scale – and rich in potential profits.
“That means they can potentially sell energy, and trade renewable energy credits, up and down the grid,” says Bjurlof, the energy consultant. Indeed, that sounds a lot like the Google-supported Atlantic Wind Connection, a coastal system that would, eventually, allow utilities to buy and sell power from Maine to Florida.
Energy companies and the business media like to attribute this flurry of leases to new cost-reducing technologies and economies of scale. And sure, those factors play a role. But according to some estimates, offshore wind energy can still cost three times as much as that from a gas-fired plant. And while costs are coming down, what is also driving the industry right now are mandates like New York’s.
This past January, Governor Cuomo unveiled a plan to make the state a leader in offshore wind by mandating that it create 2.4 gigawatts of offshore electricity by 2030, enough to power 1.2 million homes. (Curiously, that’s the same amount of clean energy he essentially cut from the grid a year earlier when he announced a deal to shut down the upstate Indian Point Nuclear Plant.) New York, New Jersey, and Massachusetts collectively have mandated a combined 7.2 gigawatts of energy from offshore wind. That’s a lot of spinning blades that utilities must put up.
It’s clear the country, and the world, needs a new energy strategy, fitting in as many renewables as possible into the mix. But whether that’s done via the carrot of tax incentives or the stick of political mandates, or both, it needs to be done coherently, on a continental – even global – scale. Elements of a solution are already on the horizon, as can be seen in California’s recent law requiring all new homes to have rooftop solar. Another element can be viewed in the current dash to build offshore power on the Atlantic. “I know it’s going to happen,” says Brady. “I’m not stupid and I know it can work. But I want them to do it right.”
But doing it right means doing it in the open. Critics point out that Deepwater has yet to reveal the specific horizontal drilling methods it plans to use to land and bury its cable – and to keep it buried in the face of shoreline erosion. On August 9, the company was sent scrambling with National Grid after the Block Island cable, carrying 34,500 volts, became exposed at low tide, 25 feet from the beach.
If the threat of global warming is real enough to require clean energy, communities need to develop a way to provide it that distributes the pain. Everything has a cost, after all. Natural gas is 50 percent cleaner than oil, but it’s still not clean. Coal is a nightmare. Nuclear is scary and polarizing, but it’s clean and it’s constant (at least until it melts down, which actually happens quite rarely, but that’s another story). And offshore wind turbines are expensive and require people who recreate and work on the ocean to give up some space (and maybe some fish and therefore some income). As Dix of the Sierra Club says, “There is no energy source with zero environmental impact.” There are going to be tradeoffs. Political leaders need to muster the courage to be honest with the masses, not outsource leadership to private companies who won’t even disclose the terms of the deal to the people who are paying for it.
Farnham knows that wind power means pain for fishers and boaters. He just wants that decision to be made for the right reasons. “People just want [the turbines] out there because they don’t want to look at them,” he says, hopping over the stern of the Kimberly and ducking past the large drum holding some 33 miles of fishing cable. But “you’re going to put 1000 structures in the water and worry about it later. It’s unfortunate. I’m all right with having offshore wind. But I’d like to see some other people make sacrifices besides us.”