More on Maryland's Offshore Wind Power Initiative

As I reported in Is an Offshore Wind Farm in Maryland's Future?, Martin O'Malley, Maryland's Democratic governor, is moving ahead with a legislative proposal to subsidize a "wind farm" off the coast of our state. A cluster of wind turbines like these ...

... would be built off Ocean City, eleven miles out into the Atlantic, if the governor gets his way.

When the wind blows, the blades of wind turbines spin, generating electric power. But the offshore version of this relatively new technology is expensive and remains unproven to an extent that even many of O'Malley's fellow Democrats in Maryland's General Assembly remain unconvinced.

In The Washington Post of January 23, 2012, the article O’Malley to try again for offshore wind development, by Aaron C. Davis, talks about the governor's latest proposal.

I personally think the costs and risks are worth taking, because wind technology is clean and green. Wind power is solar power at one remove, in that the warmth from the sun is what makes the winds blow. No fossil fuels are used, no carbon is expelled into the atmosphere, and global warming is thus not facilitated.

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According to Wikipedia's article on wind power, the United States already has (as of 2010) 40,180 megawatts of generating capacity from the wind, putting us in second place behind China, with 44,733 MW. "Offshore wind power can harness the better wind speeds," the article says, that exist out away from the land.

Governor O'Malley's immediate problem is that Maryland would have to subsidize the offshore wind farm, as it would be too expensive for private developers to build without financial incentives. Money, tax breaks, and/or loan guarantees would likewise need to come from the federal government. Maryland's monetary contribution would ultimately wind up being paid for by higher electric bills charged to residential households and large commercial accounts.

Legislation the governor introduced in the last General Assembly session, in 2011, would have charged residential households a flat $2.00 per month on their electric bills in the form of an explicit line item. That bill failed to pass. This year's version does not include a flat line item for customers. It assumes the costs of wind generation will be folded into the base electric rates customers pay.

It's still supposed to top out at $2.00 extra per month, but the Post article says there's a catch:

If solar [power] is any example, that means it could be nearly impossible for residents to calculate the cost of the subsidy. 

Although O’Malley’s bill would mandate that the cost be no more than $2 per month, that per-household price would have to be estimated up front on a 20-year prediction of future energy prices — a term twice as long as the state’s Public Service Commission typically forecasts. 

If the commission’s estimate is wrong, the subsidy for wind could be much higher or lower. 

“We could look like geniuses, or people could experience the price more” than $2, said one administration official, who spoke on the condition of anonymity to freely discuss the governor’s proposal.

How would the financial details work?

To make the bill more palatable to [Sen. Thomas M. Middleton, (D-Charles County), who chairs the Finance Committee, and his counterpart in the House, Del. Dereck E. Davis (D-Prince George's County)] O’Malley’s office also did away with a mandate in last year’s version that required utilities to buy wind power at a set price high above current market rates.

Rather, to ensure that developers can turn a profit, the state’s Public Service Commission, which regulates utilities, would set up a kind of commodities market. The electricity created from offshore wind would be sold at competitive prices. But the energy would also come with renewable-energy credits. The credits are needed by the state’s power generators to meet Maryland guidelines requiring them to obtain a growing share of their power from wind, solar and other renewable sources. The price of the credits would fluctuate in tandem with market rates to ensure that offshore wind producers can continuously count on a stable profit.

By "sold at competitive prices" I assume the Post means that an open market would determine the price of the wind power generated off Maryland's shore; there would not be a preset price. I further assume the the "renewable-energy credits" that "the state’s power generators" need to amass — according to what mandate I don't claim to know — would be bought and sold on a secondary market whose prices would "fluctuate in tandem" with those for the power itself.

I admit to having doubts, by the way, as to whether market-determined prices would indeed "ensure that offshore wind producers can continuously count on a stable profit." Just as agricultural farmers aren't always guaranteed profits each year, why is it thought that tomorrow's "wind farmers" would be able to count on profits?




Clearly, the mandate that "the state’s power generators" — i.e., existing power plants that use coal, natural gas, or nuclear power — amass credits that derive from wind power generation is key. The operator(s) of the wind farm would receive the proceeds of selling the credits, which would amplify the proceeds of selling the wind power itself.

But existing electric-power generators would surely pass the cost of the credits on to their customers, in whole or in part. Ideally, as I say, the governor anticipates that the passed-on cost would top out at $2.00 per residential customer per month, and at "2.5 percent for the state’s largest commercial and industrial businesses."

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Two key questions, then, are (1) Will the legislature pass O'Malley's complex proposal? and (2) Would it work out the way the governor hopes, if it becomes law? My guesses are "yes" and "yes" — but don't bet the farm on it.

Is an Offshore Wind Farm in Maryland's Future?

Here's a picture of what may one day soon arrive off our Maryland coast, 11 miles out from the beaches of Ocean City:

It's an offshore wind farm. The propeller-like things are wind turbines. When the wind blows, the blades turn, generating electricity.

Electric power from the wind sends no carbon into the atmosphere and so does not contribute to global warming. It's a renewable, indeed eternal, source of electricity. But it's not presently as cheap as, say, burning coal to power our light bulbs, heating, air conditioning, and the like.

One reason wind power is relatively expensive is that technologies to harness it are new. They have not yet moved "down the cost curve" to the degree experts expect over time.

So building an offshore wind farm today is costly ... and also risky, in that the market for wind power may fail to develop the way experts hope. Yet the only way to move wind power down the cost curve is to invest in it. Building wind farms will, over time, lower the costs of building more wind farms.

Maryland governor
Martin O'Malley

Maryland's Democratic governor, Martin O'Malley, thinks the costs and risks of building wind farms are tolerable even now, with governmental help. He'll be introducing legislation in this state's upcoming General Assembly session that, according to this recent article in The Washington Post, would increase the monthly electric bills of "ratepayers to help cover the cost of making offshore wind energy competitive."

A similar "measure to subsidize development of a multibillion-dollar offshore wind farm" which Gov. O'Malley introduced last year, says the article, "would have added a couple of extra dollars to every Marylander’s monthly electric bill for 20 years and thousands onto those of the state’s largest businesses."

The details of this year's modified proposal have not yet been released, but it appears to embrace a different mechanism for generating the intended financial subsidies. Accordingly:

The new plan would increase ratepayers’ bills, perhaps by an amount nearly equal to what last year’s plan would have, but in a way that would obfuscate such costs, experts said. The credits would not appear as a line-item charge but would be factored into the overall price of electricity sold in the state, raising base electric rates charged to Maryland customers.

I am a strong supporter of Gov. O'Malley in this. I feel that there is no better time for "green-energy" initiatives than now. My reasons:

1. They'll help wean us off fossil fuels in general.
2. They'll help end reliance on foreign oil in particular.
3. They'll help forestall global warming.
4. They'll pollute less in general, creating less acid rain and other harmful effects.
5. They'll use 100% renewable resources, and thus be sustainable into the far future.
6. They'll create a new industry, with permanent new jobs.

It is the creating of new jobs that is the biggest political selling point today, given the sluggish economy and the number of years it would take to get the wind farm up and running. From the point of view of Maryland, these jobs could be a hugely attractive plus for the state. And I imagine another plus factor for Maryland would be that the electric power from the wind farm could, some of it, be sold outside the Free State, thus enriching Maryland's coffers.

Yet the forthcoming O'Malley proposal will be a hard sell to even the governor's fellow Democrats in the state's Senate and House of Delegates. One reason is that the subsidies offered by the state to the wind farm's prospective developers would have to be amplified by sizable federal subsidies to those same developers, mainly in the form of tax credits and loan guarantees.

And those would be harder to come by than they might have been even last year. The general belt-tightening that we saw at the federal level in 2011 in response to the national debt crisis has made Washington largesse much harder to come by now. Add to that today's inflated skepticism about green-energy subsidies in the wake of the Obama administration's much-scorned Solyndra mistake, and you have reason to doubt the necessary federal subsidies would materialize.

I'll be keeping my eye on Gov. O'Malley's wind farm initiative as details become available and as the Maryland General Assembly comes to terms with it.

Environmentalism and Subsidiarity

Fair warning: this blog post is about a concept ... and a nuanced one at that. It's called "subsidiarity." I ran across mention of it in a recent column by Washington Post op-ed writer Michael Gerson, "Rick Santorum and the return of compassionate conservatism."

The column lovingly caresses the candidacy and ideology of GOP presidential hopeful Rick Santorum, a former Pennsylvania senator. I want to make clear at the outset that I do not endorse Santorum. Repeat, do not. For one thing, I despise his opposition to same-sex marriage, to a woman's right to a safe abortion, and to the use of contraceptives to forestall pregnancy.

I am a liberal Democrat. I could not in good conscience vote for any of the Republican hopefuls. But that's not what this post is about. Rather, what interests me is this passage in Gerson's column:

The Catholic (and increasingly Protestant) approach to social ethics asserts that liberty is made possible by strong social institutions — families, communities, congregations — that prepare human beings for the exercise of liberty by teaching self-restraint, compassion and concern for the public good. Oppressive, overreaching government undermines these value-shaping institutions. Responsible government can empower them — say, with a child tax credit or a deduction for charitable giving — as well as defend them against the aggressions of extreme poverty or against “free markets” in drugs or obscenity.


This is not statism; it is called subsidiarity. In this view, needs are best served by institutions closest to individuals. But when those institutions require help or protection, higher-order institutions should intervene. So when state governments imposed Jim Crow laws, the federal government had a duty to overturn them. When a community is caught in endless economic depression and drained of social capital, government should find creative ways to empower individuals and charities — maybe even prison ministries that change lives from the inside out.



This is not “big government” conservatism. It is a form of limited government less radical and simplistic than the libertarian account. A compassionate-conservative approach to governing would result in a different and smaller federal role — using free-market ideas to strengthen families and communities, rather than constructing centralized bureaucracies. It rejects, however, a utopian belief in unfettered markets that would dramatically increase the sum of suffering.

The kernel of the subsidiarity idea is: " ... needs are best served by institutions closest to individuals. But when those institutions require help or protection, higher-order institutions should intervene." And so there should be: " ...  a different and smaller federal role — using free-market ideas to strengthen families and communities, rather than constructing centralized bureaucracies."

Subsidiarity, by the way, is an established principle of Catholic teaching which says "that human affairs are best handled at the lowest possible level, closest to the affected pesons."

Subsidiarity and the Environment

Dealing with environmental problems today seems to me to require an approach that honors and respects subsidiarity. By that I mean that we need to build our responses to environmental threats from the ground up, not from the top down.

Inner Harbor, Baltimore, Maryland

Here's a case in point. In a recent opinion piece in The Baltimore Sun, "A swimmable, fishable harbor by 2020: Why not?", Michael D. Hankin, who is chairman of the Waterfront Partnership of Baltimore, writes about what it will take to clean up Baltimore's Inner Harbor.

Baltimore is one of America's oldest port cities, with access to the Chesapeake Bay and the Atlantic Ocean via the Patapsco River. Nestled right at its heart is an array of harbors, the inmost being the Inner Harbor, site of the tourist-attracting HarborPlace. But, beautiful as the scene may be, the water itself is polluted by sewage and storm runoff after every heavy rain. Just as the Chesapeake itself is in sore need of cleaning up, so too are the Inner Harbor and the Patapsco River.

But how can that happen?

Answer: there needs to be an active partnership of like-minded entities: "a coalition of businesses, nonprofit organizations, city agencies, and citizens," as the Healthy Harbor website puts it. Healthy Harbor is the name of an initiative undertaken by Waterfront Partnership of Baltimore. Only by virtue of such a coalition do we have a chance to address the city's sewage/runoff problem in all of its causes and effects.

This is the bottommost layer of the subsidiarity cake. But as I wrote in Dead Zone in Our Chesapeake Bay, there have to be other layers as well. The city's problem with water pollution slots into that of the entire Chesapeake region, which is killing the bay. The region is made up of six states and the District of Columbia, and all of those mid-sized governmental entities have to be on board with a "pollution diet" that fairly distributes the burden of cleanup costs among them.

The pollution diet itself was the work of the Environmental Protection Agency, at the federal level. Recent history has shown that the states themselves were unable to negotiate an effective response to the dying bay on their own. The EPA had to step in as the top layer of the subsidiarity layer cake.

But this is not the nuanced approach to environmental issues that we hear from our loudest political voices. Instead we hear, at one extreme, "kill the EPA," and at the other (that of President Obama) a lot of tacking this way and that, with no clear sense of direction.

The Things That Really Trouble Me Most ...

Sadly, not a picture of me ...

Anyone who scans the recent posts in this blog can see that I am a beginner as an environmentalist. Since mid-2011 I've been blogging about how we need to come to cherish the earth. In the last seven months I think I've made some strides toward becoming an earth-cherishing environmentalist, personally speaking. Yet I've found it hard to turn myself into a total tree hugger.

One thing that thankfully has changed for me is that I now pay attention to the environmental news. I hadn't used to. I'm now in the habit of turning the pages of each day's Washington Post in search of articles about the environment. There often are none ... which is just one of the things that trouble me greatly.

There ought to be more news coverage about the environment. There ought to be a regular op-ed column about all things ecological. But there aren't.

Another thing that troubles me is that none of the Republican candidates for president has a clue about the environment.

Mitt Romney, former governor of Massachusetts, is supposedly the most liberal of the lot. Here's a paragraph from "Mitt Romney comes under attack after win in Iowa" in a recent edition of the Post:

Former New Hampshire governor John Sununu took the stage here [in Manchester, New Hampshire] with Romney and repeatedly called him a “true conservative.” He highlighted Romney’s Massachusetts record of cutting spending and taxes, standing “shoulder to shoulder” with antiabortion groups, fighting same-sex marriage and opposing his state’s involvement in a regional effort to limit greenhouse gas emissions.

I've italicized the anti-environment part.

For his part, President Obama hasn't been a whole lot better. He's dithering about the Keystone XL pipeline. He declined to promulgate tougher anti-smog standards. He hasn't put his foot down against oil exploration in the Chukchi Sea off Alaska's north coast. He hasn't stood foursquare for a cap-and-trade system or a carbon tax that would tilt our future energy usage away from fossil fuels. He hasn't developed a total energy plan for America's future that these other choices would slot into.

But maybe, one can argue, Obama is just being a realist, given the direction the political winds are blowing from. Accordingly, another thing that troubles me is that the leading environmental advocacy groups unfailingly adopt positions that are adversarial rather than realistic. Quite understandably, they see their function as pulling as hard as they can in the opposite direction from the general numb-to-the environment choices America might otherwise make.

In so doing, leading environmentalists turn themselves into unmitigated radicals. In the short run, that maximizes their (albeit too limited) influence. In the long run, I'm not so sure.

In the long run, what matters is getting as many Americans as possible, of whatever political stripe, on board with the need for us to adopt a revised stance with respect to Mother Nature. We need to stop seeing nature as a bank with an infinite credit line which we can keep drawing on at will to bankroll our economic growth. We need to repeal the supposed wisdom that says we can forever conceal nature's primary role in offering up sustenance to human aspiration.

Right now, nature to us is a pinball machine. For centuries, we expected technological advancement to obviate the tilt switch, so we could rack up any score we wanted. Now the tilt switch is coming back into play. Whether it's the inevitable price of global warming or the cost of widespread deforestation, rampant pollution, lost wetlands, lost biodiversity, we see "Game Over" on the horizon ... and we studiously look the other way.

And, truth to tell, I really no different. I understand with my intellect that we desperately need to change. With my gut, not so much.

Keystone XL pipeline: a
jobs creator?

My intellect tells me, every time I hear the economy is "getting better," that it's a false improvement because it's predicated, as always, on numbers that ignore the costs of environmental damage ... indeed, whenever there's an environmental disaster, the money spent on cleanup is folded into gross domestic product, in the plus column. One main argument in favor of the Keystone XL pipeline is that it will create jobs. Opponents say the jobs will be temporary. But what troubles me is that both arguments sidestep the real issue,  which is how can we wean ourselves off oil?

I keep telling myself that, but it puts me on the sidelines of politics-as-we-know-it to insist on it.

And that's another thing that really troubles me ...