Op-Ed: Offshore wind — another Dust Bowl in the making?

H.L. Mencken once said, “There is always an easy solution to every problem — neat, plausible, and wrong.” He could have been speaking about New Jersey’s current quest to achieve the very worthwhile objective of 100% clean energy by 2035.

A major focus of this plan is significant investment and development of an offshore-wind industry along the New Jersey coast. Clean energy is certainly something we should strive for but in many ways our current blind crusade, devil be damned, toward the implementation of offshore wind does present troubling questions that may not have been sufficiently addressed yet.

History is full of bad government decisions that seemed like a good idea at the time. Take the Homestead Act, for example, in which settlers were given free acreage in Kansas, Oklahoma, East Texas and elsewhere to farm. The government’s objectives were economic development, continuation of the young country’s Manifest Destiny westward and an increase in agricultural production. Most settlers farmed land or grazed cattle, but soon unanticipated consequences began to appear. Farmers plowed over prairie grasses and planted dryland wheat. As the demand for wheat grew, cattle grazing decreased, and more acres were plowed and planted. When the world market for wheat became oversupplied, prices dropped, and farmers reacted to their loss of revenue by planting more wheat to make up on volume what they were losing on price. This dryland farming led to the systematic destruction of prairie grass. With the land gradually being stripped bare, environmental damage began to occur. Finally, with the drought of 1930, over-farmed land blew away. The heartland of the United States became a vast dust bowl.

An article on the Dust Bowl by Jonathan Coppess of the University of Illinois Urbana-Champaign offers haunting parallels to New Jersey’s clean-energy policy:

“As one of the worst environmental disasters in our history, the Dust Bowl was a confluence of policy, human activities, climatic shifts, and the outer bounds of nature’s tolerance. It should counsel humility about the ability of humans to perpetually push natural resources for their benefit. The dust bowl was triggered by an extreme drought — part of a natural cycle over which we had little knowledge and less control — but it had been built by policies and misguided actions in an unfamiliar environment.”

Into the unknown

An often-quoted remark by Donald Rumsfeld, former Secretary of Defense, during a discussion linking Iraq with weapons of mass destruction states:

“Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tends to be the difficult one.”

So are there any “known unknowns” and more troubling, “unknown unknowns” lurking beneath the surface of efforts to accelerate offshore wind development?

From an economic perspective the following questions remain largely unanswered: What will offshore generation and transmission cost and how will it be funded? Will the siting of turbines 10 miles off our coast have an adverse effect on the important tourism industry? What about the ability of developers to follow through on their financial commitments if projected returns don’t materialize? Will developers have the funds to decommission when that time comes or will they plunge special-purpose subsidiaries into bankruptcy, leaving ratepayers to clean up their mess? Will the turbines have any effect on our fishing industry and the people who have made their living in it for generations? How will offshore turbines do when competitive technologies for clean energy evolve with lower cost, higher efficiency or greater practicality? Sweden, Norway and Germany are already abandoning investments in offshore wind, replacing it with small modular nuclear. Here at home, PSE&G and Eversource have backed off from prior investment commitments to offshore wind.

There are other questions as well that have barely been explored, at least publicly. Regarding national security, an open field of hundreds of turbines in the middle of the Atlantic is an inviting soft target for terrorists or adversarial nations. How will we defend these resources?

From an ecological standpoint, questions remain about the effects on birds, fish, mammals and the overall ocean environment. The effects of hurricanes with high winds and huge waves on thousand-foot structures permanently anchored to the ocean floor present other questions.

Betting the ranch on a megaproject

Businesspeople and politicians love to be involved in megaprojects — big important development efforts and resume builders. Megaprojects get “mega” attention and “mega” money, with the expectation of greater benefits. However, experience suggests this is an illusion. Megaprojects carry a large learning burden because project difficulty is deceptive, outcomes are hard to predict and the projects don’t grow in proportion to the number of outcomes considered in the original plan, they grow exponentially. Megaprojects are the perfect spawning ground for Rumsfeld’s “known, unknowns” and “unknown, unknowns.”

In contrast, incremental innovation calls for introducing small, but frequent changes in strategy or programs under the guidance of a comprehensive plan using stakeholder feedback to guide future steps, acting as a throttle on unanticipated, problematic by-products.

Besides being an unwieldy megaproject, aggressively pursuing offshore wind as the silver bullet for carbon-free energy includes many unknowns. In the face of so many open questions, and worse, unknown unknowns, is there a better approach?

Many are familiar with the concept of “portfolio theory” in investing. Simply, it is the accumulation of multiple stocks with differing features, prospects, industries and so forth to even out unanticipated variation in expected future earnings from any single stock. The thought being that if one stock goes bad due to circumstances in their unique environment, the other stocks, unaffected by those circumstances, will not have similar variation in their earnings, leveling overall portfolio earnings. When stocks go south permanently, they are sold and when others perform, they are emphasized in future portfolios.

Many have advocated a similar portfolio approach in energy policy under the tagline “all of the above.” Instead of making a bet-the-ranch investment in offshore wind, we could consider a more diversified portfolio of programs as we transition to a clean-energy future. Nuclear, natural gas, renewable gas, hydrogen, solar, hydro, efficiency, energy storage, carbon sequestration, reforestation, terrestrial wind and countless other technologies should all be included in a balanced portfolio that isn’t hastily skewed to offshore wind. If offshore wind proves effective, it can be emphasized in future energy policy, and if it is ineffective, it can be phased out. Gradual and deliberate implementation will provide the benefits of incremental innovation, yielding a portfolio effect that provides risk mitigation and avoids the potential pitfalls of a costly megaproject.

H.L. Mencken also once said, “The urge to save humanity is almost always a false front for the urge to rule it.” Our clean-energy future, and our environment, are far too important to be driven by special interests, naïve idealism or for-profit developers.

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