By Sandy Bauers, Inquirer Staff Writer
The three New Jersey wind developers thought they had the whole deal locked up.
After years of study, the Board of Public Utilities had granted each of them not only its blessing, but $4 million apiece for more research.
But then, along came a Seattle businessman, and suddenly the ocean wasn’t nearly big enough to hold them all.
He proposed a wave farm smack in the same spot of ocean the wind guys thought they had dibs on, about 17 miles off Atlantic City.
To do it, he took advantage of a bureaucratic loophole that has yet to be sorted out.
The resulting storm of legal filings, protests and accusations of a land grab – make that an ocean grab – has yet to abate.
Just about the only thing everyone agrees on is that something must be done, and soon.
“What’s at stake is whether we ever see any renewable energy development on the outer continental shelf. That’s the bottom line,” said Mike Olsen, an attorney for Bracewell & Giuliani, a Washington law firm that specializes in energy issues.
The outer continental shelf is 1.7 billion acres of land under the ocean. It’s a region that politicians, if not geologists, define as roughly anywhere from three to 200 miles offshore.
On Monday, Interior Secretary Ken Salazar will hold a hearing at the Atlantic City Convention Center – the first of four nationwide – to discuss the potential and the future of the outer continental shelf.
One topic will likely be the New Jersey water fight. Here’s how it unfolded:
The ocean off New Jersey is fertile turf for wind power. Miles out on the flat ocean, the winds are both strong and, compared with land winds, steady. It also is close to where electricity demand is highest – the densely populated coastal area – which lessens transmission issues.
Last fall, the BPU selected three wind developers – Bluewater Wind, Garden State Offshore Energy (a joint venture of Deepwater Wind and PSEG), and Fishermen’s Energy, a cooperative of commercial fishermen looking at new ways to harvest from the sea.
About the same time, the governor upped the ante for the technology, setting a goal in his energy master plan of 1,000 megawatts of wind – about the amount the three proposals would generate – by 2012 and triple that by 2020. The only place to meet that, all agree, is offshore.
The main obstacle at that point was that the Interior Department’s Minerals Management Service (MMS), which has the authority to regulate offshore wind, did not have a system in place to issue permits. It was being worked on.
So the developers waited.
Meanwhile, Burton Hamner of Seattle, president of Grays Harbor Ocean Energy Co., zigged where others had zagged.
He filed seven proposals for offshore wave farms with the Federal Energy Regulatory Commission (FERC), which under different legislation was given authority over “hydrokinetic” projects. As in tides, currents – and waves.
In New Jersey, what got everyone’s attention and provoked the strong reaction was that the area Hamner picked engulfed the area proposed for two of the wind farms and was near to that proposed for the third.
Odder still, most scientists have dismissed the viability of Jersey wave energy, which typically uses buoys and turbines to extract energy from the up and down motion of the waves.
“You’re on the wrong coast,” said Roger Bedard of the Electric Power Research Institute, an industry group. The prevailing winds blow from west to east. In places like Oregon, he said, waves have had the entire breadth of the Pacific Ocean to build. Back east, the waves buck the prevailing winds and are relatively puny.
Protests poured in to FERC from the wind developers, the MMS, the BPU and others.
They said Grays Harbor’s plan was scant on details, short on science, and all but preposterous in the vast acreage it sought to tie up.
No way could he hope to develop all those sites, they said. And wave power, unlike wind, has not yet proven to be commercially viable.
The clear intent, said Bluewater in its filing, was “to engage in site banking and improper boundary designation.” Was he trying to tie up the site and then get them to pay him to go away?
“We thought it was a very aggressive filing,” said Jim Lanard, Bluewater’s head of strategic planning.
“It’s a big ocean,” said Chris Wissemann, head of Deepwater. “It’s sort of uncanny that he happened to land right on top of two of three mapped wind farms.”
Hamner defended his plan. He said he filed for seven sites to “diversify . . . like any smart investor” and acknowledged it would be all but impossible to develop them all.
He maintained he used objective criteria to establish the sites, and that after avoiding the shipping lanes and moving far enough offshore to not be an eyesore, there wasn’t a lot of usable shelf space left off New Jersey.
He said the area was large because he wasn’t sure what was down there on the shelf – rock ridges? shipwrecks? – until he did high-resolution sonar surveys.
He said that he was willing to coexist with the others, that their proposals were not mutually exclusive, that he wants to work with them.
In fact, he openly said, as many darkly intimated, that wind is his ultimate goal; he intends to put wind turbines atop wave generators.
“The wave energy off New Jersey is not particularly good,” he said – agreeing with the scientists and the wind developers. “But FERC regulates wave power, and their permit system exists and can be used, whereas . . . no one can even apply for a project under MMS.”
“And, by the way, anyone else can replicate our strategy,” he said. “Anybody else who wants to draw boundaries on a map and submit it to FERC can start the permit process.” Since it’s “long and horrible, you have to start as soon as you can.”
Last month, the Interior Department and FERC announced that they had reached an agreement, although one merely to agree. They were going to work things out and develop a memorandum of understanding.
They announced no timeline and no methodology.
While it didn’t quite ease the fluttering hearts of the wind developers, they nevertheless saw it as a hopeful sign.
“I’m more positive than I was a couple weeks ago,” said Nelson Garcez, vice president of PSEG Renewable Generation and head of Garden State Offshore Energy. “We really expect that Secretary Salazar . . . will be able to spell out a very clear policy.”
The wind developers think that once officials look at all the proposals seriously, the Grays Harbor proposal will be blown out of the water.
MMS has assured the wind companies that it is nearing completion of its regulatory framework.
FERC, meanwhile, said the Grays Harbor proposal remains under consideration. Last week, Hamner gave a presentation at a wind energy conference in Washington, and he didn’t get booed.
Indeed, some of his detractors actually seemed to soften, wondering if Hamner wasn’t in the end an astute businessman trying to push federal officials into patching up the regulatory mess.
Deepwater’s Wissemann, for one, had to give the guy grudging credit: “Had we all banded together and hired someone to elevate the issue,” he said, “we couldn’t have done better.”