Green jobs not blowing in the wind

Washington Post:

The Obama administration has made offshore wind energy a priority and an important part of its plans to create jobs and combat climate change, but even such favorable political breezes have not been strong enough to propel the nation's first projects.

The economy has intervened, and an unfamiliar federal approval process could hold up leading projects.

Just last month, Interior Secretary Ken Salazar distributed leases to explore five possible wind farm sites off Delaware and New Jersey on the outer continental shelf. The leases were the first ever, and Salazar proclaimed "a new day for energy production in the United States."

But that day may be years in the dawning.

Developer Bluewater Wind won two of the leases for sites 14 miles off Delaware and 15 to 18 miles off New Jersey. The company seemed to be barreling toward being first in the emerging industry, with plans to plant a wind farm into the seabed at Rehoboth Beach, Del. A year ago, it had even struck an agreement to sell power from the giant windmills to Delmarva Power.

But now, its parent company, Australian investment firm Babcock & Brown, has buckled under the weight of the global economic downturn and is selling off its assets to reduce debt. Bluewater is looking for investors to keep its projects moving.

"They're just reapproaching all of the other players out there, hat in hand," said Brian Yerger, chief executive of Aerca Advisors, a consulting company focusing on renewable energy. "There are a lot of balls in the air."

Hundreds of large and small wind farms have been built on U.S. land, but that sector also is feeling financing frustrations. This week, oilman T. Boone Pickens backed off of his plans to build the world's largest wind farm in the Texas Panhandle, citing tight credit markets and lower natural gas prices.

Pickens could not find financing to pay for the transmission lines that would hook up his wind farm to the Texas grid. Offshore developers face a similar problem. They need to find customers to buy their power and must do so before they can get financing to build. They must also navigate an untested federal permit process that was scheduled to take effect late last month, putting projects many years away from completion. Construction on even the most promising projects in Rhode Island, along with those in Delaware and New Jersey, won't begin for at least four years.

"I guess I would say there's a lot of uncertainty out there in the industry," said Matthew Kaplan, a senior wind analyst at Emerging Energy Research.

Ed Feo, a partner specializing in renewable energy projects at law firm Milbank, Tweed, Hadley & McLoy, said the fact that offshore developers are entering uncharted waters inevitably increases the level of uncertainty.

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The story acknowledges that the Cape Wind project has left a bad taste in the mouth of investors because of the opposition of Ted Kennedy among others. It is an example of the hypocrasy of on the left when it comes to any form of energy. They hate them all and will find reason to oppose any project. If Boone Pickens can't get financing for his wind projects, that tells you something about the viability of the wind business--he needs high natural gas prices to make the loans viable in the minds of the lenders. The costs of tying into the electric grid has also become a deal killer in all areas of the country.

The offshore projects have their own drawbacks that make them difficult even in places where regulators are welcoming. A project approved by the State of Texas off the coast near Corpus Christi never made it off the drawing boards.