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CAPE WIND'S NEWEST PUBLIC RELATIONS FIRM
Public Money in Private Pockets - the Great Wind Scam
Ponzi was a piker, Bernie Madoff a small time con artist; Big Wind is the new king of the con, supreme master of the scam. And, in their never ending crusade to separate taxpayers from their money, to redistribute American wealth from American citizens and electric rate payers to themselves the new breed of energy developers - the wind farmers - have enlisted the best public relations people money can buy: former government officials of the highest caliber. The policy professionals who work to promote the new, green technology of wind power leave their high level government positions, pass through a revolving door and step right into leadership positions in various private "associations" where they exert enormous influence on public process but do so in the most private ways.
Now, by way of introduction, let us explore some of the more powerful players behind the scenes in the new offshore wind energy scam.
We have already seen that former director of the Minerals Management Service Randall B. Luthi is the new president of the National Offshore Industries Association (NOIA). He is following what appears to be a long tradition because his predecessor as NOIA president from 2000 into 2010 was Tom Fry, himself a former director of MMS. In fact, Fry had been deputy legal counsel for the U.S. Department of Energy in its Houston office and had held the most senior post at the Bureau of Land Management. NOIA appears to be an alumni association for former leaders of the very agencies whose decisions have enormous impact on the fortunes of the more than 250 companies who are members of NOIA. Nice to NOIA.
Fry stepped down from his NOIA presidency at the end of February this year but can now be found on the board of trustees of the National Marine Sanctuary Foundation. In fact, he is the CEO. Also serving as trustees of the Foundation are two other interesting former government officials. One is Andy Karsner, former United States Assistant Secretary for Energy Efficiency and Renewable Energy and James Lawrence Connaughton. Connaughton served as Chairman of the White House Council on Environmental Quality and as Director of the White House Office of Environmental Quality, both positions held under president George W. Bush. As one of Bush's senior advisers for energy and environmental policy Connaughton wielded enormous but largely unpublicized power. He was tasked with coordinating inter agency implementation of administration policy in the areas of energy development, environmental and natural resource programs. He is also the brother-in-law of Josh Bolten who served first on Vice President Dick Cheney's staff and was probably the coordinator of Cheney's secret energy policy advisory group, then as head of the Office of Management and Budget and finally as White House Chief of staff. It has been rumored that Connaughton personally carried messages of support for Cape Wind from the White House to MMS along with demands for full approval of the project. Connaughton is now Executive Vice President for Corporate Affairs, Public and Environmental policy at Constellation Energy. Could it have have been Connaughton who told Luthi what to do in the Cape Wind review?
Josh Bolten's father, the late Seymor bolten, was a career spy with CIA. In his later career he was an influential senior official in the U.S. intelligence community and became close to George Herbert Walker Bush as both an adviser and friend.
Influence begets influence. National Marine Sanctuary Foundation is the host of Capital Hill Ocean Week 2010, held in Washington on June 8, 9 and 10 this year. This is to be a symposium focused on "...the intersection between ocean and energy issues." Among its listed sponsors is NOIA. One wonders if the attendees will be able to smell the oil from the Gulf. On June 7 Randall Luthi wrote a letter, on the NOIA letterhead, to Robert Abbey who is acting director of MMS (replacing the fired scapegoat Liz Birnbaum). In this letter Luthi sings a sad song of how the BP disaster in the Gulf of mexico is affecting or will affect the oil and gas industry, causing job losses and all manner of terrible things. Luthi does not once mention the economic plight of Gulf tourism or fisheries and he cautions against overreaction at MMS and argues for a relaxation of the recently announced suspension of deepwater exploration. It is telling that Luthi does not once express a belief that MMS bears any blame for the Gulf crisis or that it should simply stop evading and ignoring its own rules. He did not ask Mr. Abbey how or why MMS had allowed deepwater Horizon to operate wuithout an oil spill response plan or back up blow out preventing equipment.
One final group worth mentioning is the Alliance for Energy and Economic Growth. It based in Washington, D.C. and for all practical purpose is just a stage name for the United States Chamber of Commerce. NOIA is a member, but then so is Peabody Energy, the world's largest non-government coal mining operator. Strange bedfellows indeed, or are they. The point is this: there is a growing mob of well connected power brokers who now form a chorus of voices singing the praise of the renewable energy movement as a way to create jobs. In fact, while renewable energy developers and advocates wag their accusing fingers at coal companies, oil and gas companies and the nuclear industry, Big Wind is simply an emerging newcomer very much in the mold of all Big Energy companies. The end game is always and only about selling energy for as much profit as possible while mining as much public money as possible.
However, offshore wind faces at least one monumental hurdle, cost. Next to solar and nuclear power it is the most expensive source of commercial scale energy in terms of capital costs.. Here is a brief explanation of offshore wind energy's cost of energy (CE). Energy (electricity) is stated in kilowatts (KW), Megawatts (MW) and Gigawatts (GW). these seem to be foreign terms but they are actually very simple. Every monthly electric bill is reckoned in terms of KWs and KW hours. 1000 kilowatts equal 1 megawatt and 1000 megawatts equal 1 gigawatt. It a little more than $1million to build 1MW of electric generating capacity fueled by natural gas. Oil and coal plants cost more and land based wind power costs around $2.5 million - $3 million/MW. Using as current examples (under construction and/or recently completed) European offshore wind farms we see the capital cost of offshore wind at $5 million/MW. And, unlike nuclear power plants which operate at 90% efficiency, offshore wind struggles to maintain 25% with newer facilities claiming to sustain 30%.
Interior Secretary Ken Salazar and other so-called experts claim that the United states can develop 54GW of offshore energy, mainly on the Atlantic Outer Continental shelf and that by the year 2030 this nation can get 20% of its electric energy from wind. But, here are some scary numbers: If offshore wind costs $5 million/MW 54GW will cost $300 billion to build in today's dollars. The wind industry simply cannot afford such costs. So, the federal government has developed a program under the American Recovery and Reinvestment Act to pay a cash (tax free) rebate of up to 30% of the capital cost of a commercial scale wind project. 30% of $300 billion is $90 billion! In addition, wind energy developers will be allowed huge tax advantages and will be granted power purchase agreements by utility companies under whose terms their energy will sell for at least twice the going market rate for electricity.
Imagine, by the year 2030 20% of our electricity will cost at least twice as much as conventional electricity, perhaps even as much as three times as much. Will this end our dependence on foreign oil? It is hard to see how when we know that less than 2% of our electricity is generated using oil as fuel.
So, what we are expected to do is to spend tens of billions of public dollars to subsidize wealthy energy developers and then increase our total electric bills to buy their high priced electricity and that is in addition to huge taxpayer subsidies in the form of accelerated depreciation allowances. Virtually every country where large scale wind development has occurred has discovered the hidden costs of wind power. Wind power is intermittent and sudden surges of new energy into the existing electric grid raise havoc with the grid so huge amounts of money are required to perform grid upgrades. The Independent System Operator for New England (ISO N.E.) is the not-for-profit operator of the New England electric grid. They estimate grid upgrades will cost another $10 billion. Of course, this money will simply be added to everyone's electric bill.
At the present time the loudest and most enthusiastic cheerleader for this ambitious scam is none other than Interior secretary Ken Salazar. He is actively promoting the construction of offshore wind facilities along the entire Atlantic coast. And, the offshore energy industry, as we have seen, is ably represented through their industry 'associations' by impressive covens of former government officials, people who until recently regulated the very folks they now promote, people who actively lobby MMS not to be too hard on their friends who only want to guarantee a clean and safe energy future for America. These clusters of influence resemble so many tar balls as they wash up on the banks of the Potomac.
This whole system of influence building is troubling. We pay six figure salaries along with benefits to people who seem to spend their time in federal service shaping and tailoring public policy to benefit those who will employ them in even higher paying jobs after they leave the federal government. It seems to me that we would all be better off if Ken Salazar and the Randall Luthi and Tom Fry types simply did what their oaths of office called for. Ken Salazar has yet to explain how BP was allowed under his tenure at Interior to get away with the murder of the Gulf of Mexico but he has time to act as the chief promoter of new energy development. Perhaps he should have been named secretary of commerce. His talents whatever they might be, are wasted at Interior. Pretty Slick, Slick.
Copyright 2010 By Peter A. Kenney