Offshore wind v2***Affirmative***TopicalityAT: T Its W/M Tax CreditA tax credit makes it federal

Walsh 13 Law Clerk for the Superior Court of Connecticut, 2012-2013 term; LLM in Taxation Candidate, New York University School of Law, 2013-2014; J.D., Suffolk University Law School

(Kevin, Renewable Energy Financial Incentives: Focusing on Federal Tax Credits and the Section 1603 Cash Grant: Barriers to Development, University of California, Davis, 36.2)//BB

Something that is federal encompasses not only actions by the federal government, but also actions by nonfederal actors with effects that may be major and which are potentially subject to Federal control and responsibility.109 Further, the distinguishing feature of federal involvement is the ability to influence or control the outcome in material respects.110 Renewable energy developments that take federal tax credits/grants appear to qualify as federal projects. Without the federal tax credit/grant, renewable energy projects would not be financially attractive for investors. This would lead to a lack of sufficient funding for renewable energy construction. Therefore, the federal government affects the outcome of renewable energy development through the availability of tax credits/grants. Hence, when the federal government provides a tax credit/grant for a renewable energy project, the project qualifies as a federal project.

AT: T Its W/M Federal landPermitting means its federal

Walsh 13 Law Clerk for the Superior Court of Connecticut, 2012-2013 term; LLM in Taxation Candidate, New York University School of Law, 2013-2014; J.D., Suffolk University Law School

(Kevin, Renewable Energy Financial Incentives: Focusing on Federal Tax Credits and the Section 1603 Cash Grant: Barriers to Development, University of California, Davis, 36.2)//BB

Usually, federal permits are needed to construct a renewable energy project.112 These federal permits are almost always required for large-scale renewable energy projects.113 Pursuant to the Federal Land Policy and Management Act of 1976, Title I, public lands are subject to federal control.114 Under Title II of the same Act, the Secretary can issue regulations necessary to implement the provisions of this Act with respect to the management, use, and protection of the public lands.115 Thus, renewable projects on federal land are federal.

We meet its federally leased land

Jensen 13 partner in the Washington, DC office of Holland & Hart LLP

(Thomas, et al, From the 35th Public Land Law Conference: Balancing Act and Paradigm Shift: The Role of Public Lands in America's Energy Future: Oceans: Are Ocean Wind Turbines like Homesteads and Gold Mines and Railroads? A Public Lands Policy Question for the Climate Change Era, 34 Pub. Land & Resources L. Rev. 93)//BB

The Submerged Lands Act (SLA) of 1953 grants states title to all submerged navigable lands within their boundaries, including rivers and marine areas generally within three geographical miles offshore. 41 The OCSLA secures to the federal government ownership rights over the Outer Continental Shelf ("OCS"), defined as all submerged lands lying seaward of the state coastal waters. 42 It also authorizes the Secretary of the Interior to administer mineral exploration and development on the OCS. 43 Over the years, the federal OCS leasing program has grown into a major revenue source for the federal government, with around $ 4 billion collected annually. 44 The industry itself is reported to have invested more than $ 80 billion in the Gulf of Mexico between 2008-2010, or more than $ 25 billion per year. 45 Congress has from time-to-time directed changes in royalty collection practices to stimulate industry investment in exploration of deep water sites. 46 Federal leasing practices have grown in complexity as the industry has developed and impacts on marine resources have emerged, particularly in the wake of incidents like the Santa Barbara spill of 1969 and the Deepwater Horizon blowout of 2010. 47 The OCS oil and gas lease terms [107] are extensive, providing for initial terms of up to ten years and extensions that may continue for as long as a lease produces revenue-generating oil or gas. 48 The process DOI uses to issue leases is complicated and expensive to a degree that mirrors the revenues; complexity and sophistication of the industry; and the tensions between oil and gas extraction and the many other public values of the oceans and coasts. Congress amended the OCSLA with the Energy Policy Act of 2005 ("EPAct"). 49 Section 388 of EPAct gave DOI authority to issue leases for offshore wind energy on the OCS. 50 EPAct specifically authorizes DOI to grant leases for activities that (1) produce or support production, transportation, or transmission of energy from sources other than oil and gas, or (2) allow for alternate uses of existing facilities on the OCS. The law also gives DOI the authority to act as a lead agency for coordinating the permitting process with other federal agencies and to monitor and regulate those facilities used for renewable energy production and energy support services. 51 The renewable energy leasing provision in EPAct was Congress' answer to a different question than how best to promote ocean wind energy. The bitter fight over the Cape Wind project in federal waters off Massachusetts had revealed that no law expressly charged any specific federal agency with authority to lease the seabed for renewable energy purposes. DOI had clear oil and gas leasing power in the OCS, but the law was silent on leasing for renewables. Congress plugged the hole in the law (and frustrated Cape Wind opponents in the process) by granting DOI renewable leasing authority - but that is all they did. 52 The law [108] clarifies the landlord's authority to lease for renewable energy, but does not affirmatively promote ocean wind in any other way. 53 The provisions governing marine renewable leasing closely resemble the oil and gas leasing provisions of the OCSLA and imply that the law's drafters saw renewable energy principally as another revenue-generating use of the OCS: "The Secretary shall establish royalties, fees, rentals, bonuses, or other payments to ensure a fair return to the United States for any lease, easement, or right-of-way granted under this subsection." 54 DOI is implementing the law largely within the paradigm of its experience with oil and gas leasing; DOI's approach is that of a landlord, carefully choosing its tenants and collecting rents and fees. DOI, acting through its Bureau of Ocean Energy Management ("BOEM"), 55 proposed its first OCS renewable energy leasing regulations in April 2009. 56 The regulations established a program by which BOEM could grant leases, easements, and rights-of-way for development of offshore wind farms on the OCS. 57 The new system allowed BOEM to offer both commercial and limited leases to interested parties through a [109] competitive leasing process, with a limited exception for non-competitive leases. 58 Commercial leases convey all access and operational rights necessary to produce, sell, and deliver power on a commercial scale over a term of up to thirty years. 59 Limited leases give lessees access and operational rights for activities that support the production of energy, but they do not allow for the production of electricity or other energy products for sale, distribution, or other commercial use exceeding the specific limit set in the lease. 60 These limited leases have a set term of five years. 61 BOEM initiates its competitive leasing process by publishing in the Federal Register a "Call for Information and Nominations" for leasing in specific areas. 62 Interested parties have forty-five days from the date of publication to comment. 63 These comments must include the area of interest, a general description of the lease purpose, a proposed schedule, and all available and relevant data regarding renewable energy and environmental conditions in the area of interest. 64 BOEM then reviews this information and uses it to prepare a lease. Once the lease is prepared, the agency holds a competitive auction to award it. 65 BOEM leasing includes a multilayered fee schedule, including annual rent, 66 annual project easement rent, 67 annual operating fee, 68 and financial assurance requirements. 69 Rental rates are set at a per-acre rate for the project 70 and a per-mile rate for any transmission easement. 71 The annual operating fee formula is based on the value of the anticipated annual power output of a project in a regional wholesale power market [110] times an operating fee rate. 72 The actual cost of the various fees will vary by location, and size of the project, but can easily amount to millions of dollars annually. The auction process BOEM intends to use in competitive lease situations will require up-front bonus payments to BOEM that will add further to the cost for the developer. 73 Deficiencies in BOEM's original 2009 leasing program became clear in its first year of implementation. The agency, applying many of the policies common to oil and gas leasing, had created a system that by any standard was slow and expensive, especially so for a new industry struggling to enter the market. 74 BOEM responded to wind industry [111] objections by creating the "Smart from the Start" program in November 2010, and rewriting its regulations, in part. 75 The agency acknowledged that "substantial concerns have been raised about the prospect of a seven-to ten-year timeline for a new and untested approval process" and proposed three new initiatives to help facilitate the siting, leasing, and construction of new offshore wind projects. 76 These initiatives included simplifying the approval process where there is a single qualified [112] developer, identifying priority Wind Energy Areas for development, simplifying the NEPA process at the leasing stage to allow use of an EA rather than an EIS, and processing applications to build offshore transmission lines. 77 The Smart from the Start initiative streamlined certain aspects of the offshore wind development process. Updated regulations regarding non-competitive leases may save lessees between six-to-twelve months of delay. 78 BOEM's identification of Wind Energy Areas off the coasts of Massachusetts, Rhode Island, New Jersey, Delaware, Maryland, and Virginia will also allow it to more efficiently assess development proposals and applications. Jumpstarting the NEPA process, the agency has initiated Environmental Assessments ("EAs") in these areas to determine the potential effects that leasing and site assessment activities may have on the environment, 79 and some of these EAs have already produced results. BOEM has issued two commercial wind leases, one off the coast of Massachusetts, and one off the coast of Delaware. 80 The Department is [113] also moving forward with the competitive lease sales for Wind Energy Areas off Virginia, Rhode Island and Massachusetts. 81 The competitive auctions will offer nearly 278,000 acres for wind energy development. 82 The agency is also planning additional lease sales for Wind Energy Areas offshore of New Jersey, Maryland, and Massachusetts, 83 determining industry interest in three areas offshore North Carolina, and obtaining suggestions and recommendations for EAs of those areas. 84 The agency is also processing a lease request from a company that has received Department of Energy ("DOE") funding to develop floating wind turbines that can operate in deep water on the Outer Continental Shelf off Maine. 85 BOEM issued a "finding of no competitive interest" for the project last December, and the company is preparing its Construction Operations Plan. 86 Once Interior receives that plan, the agency will conduct an Environmental Impact Statement. 87 [114] BOEM is expecting to receive a lease request for a site off Oregon from another company that received DOE funding to develop floating wind turbine technology. 88 It is also carrying out planning and environmental work associated with a proposed mid-Atlantic wind energy transmission line along the East Coast. The "Atlantic Wind Connection" would run from southern Virginia to northern New Jersey, transmitting to the onshore grid power produced by wind facilities off New Jersey, Delaware, Maryland, and Virginia. 89 The project would bring as much as 7,000 MW of wind turbine capacity to the grid. 90

AT: T Ocean developmentUtilization of ocean resources, space and energy

JIN 98 Japan Institute of Navigation, Ocean Engineering Research Committee, http://members.j-navigation.org/e-committee/Ocean.htm

2. Aim of Ocean Engineering Committee

Discussions of "Ocean Engineering" are inseparable from "Ocean Development." What is ocean development? Professor Kiyomitsu Fujii of the University of Tokyo defines ocean development in his book as using oceans for mankind, while preserving the beauty of nature. In the light of its significance and meaning, the term "Ocean Development" is not necessarily a new term. Ocean development is broadly classified into three aspects: (1) Utilization of ocean resources, (2) Utilization of ocean spaces, and (3) Utilization of ocean energy. Among these, development of marine resources has long been established as fishery science and technology, and shipping, naval architecture and port/harbour construction are covered by the category of using ocean spaces, which have grown into industries in Japan. When the Committee initiated its activities, however, the real concept that caught attention was a new type of ocean development, which was outside the coverage that conventional terms had implied.

Ocean space includes offshore marine structures

Sawargi 95

(T, Coastal Engineering - Waves, Beaches, Wave-Structure Interactions, p. 315)//BB

Marine structures discussed in this chapter are mainly for utilizing ocean space, not for providing a sheltered water area. Therefore, functions of marine structures differ somewhat from those for wave control described in Chapter 4. By using the term "ocean space utilization," we can quickly imagine an offshore development. Thus it is adequate to focus on offshore structures as the main subject of this chapter. There is another type of marine structure for ocean space utilization, such as a piled pier for berthing ships, an oil boom for preventing the spilt oil from spreading and so on. In this chapter, hydrodynamic aspects of these marine structures are presented, focusing on engineering design matters. Concerning an aqua-cultural structure, which should be classified as a marine structure, we would like to describe it later in Chapter 8. because it would be desirable to discuss it from not only engineering aspects but also ecological aspects.

AT: T OceanOffshore wind is ocean energy

Thornton 14

(Stephanie, Ocean Energy Explained: Offshore Wind, http://cleanreach.com/ocean-energy-explained-offshore-wind/)//BB

Ocean energy is just as it soundsenergy powered by the waves, winds and currents of the ocean. This is the first in our What is Ocean Energy? series of blog posts where we examine the five types of ocean energy: tidal, wave, current, thermal and offshore wind.

AT: T Ocean ListOcean development is wind, wave, current, solar and hydrogen

Portman 8 PhD, postdoctoral fellow in the Marine Policy Center at Woods Hole Oceanographic Institution

(Michelle, Offshore Alternate Energy Moves Forward, http://greendecade.org/news/news_offshoreenergy.html)//BB

Of more nationwide concern, last December the Department of Interior published a final decision regarding the Programmatic Environmental Impact Statement on the establishment of the Alternative Energy and Alternate Use Program for the Outer Continental Shelf. The shelf is an offshore area under federal jurisdiction, typically extending from 3 miles to about 200 miles out to sea.

A Programmatic Environmental Impact Statement (PEIS) evaluates the environmental impacts of broad agency actions. Establishment of the Alternative Energy and Alternate Use Program is such an action; it involves implementing a program that sets the stage for site-specific actions to follow. In other words, the assessment is conducted in anticipation of environmental impacts that will results from an expected course of actionin this case, the permitting of offshore alternative energy facilities. The Secretary has adopted all but two of the 54 best management policies proposed based on the findings of the PEIS. So the final word is "GO", initiating the establishment of a federal seabed leasing program for alternative energy similar to what currently exists for oil and gas development.

On the one hand, this is welcome news. It means that it will be easier to gain approvals for such facilities; the program will provide some bureaucratic certainty and systematic environmental review. However, it also means that more ocean development will occur and at a faster pace.

Such development projects include: offshore wind energy, wave energy, ocean current energy, offshore solar energy, and hydrogen generation. MMS, the administrating agency, will also have jurisdiction over projects that make alternate use of existing offshore oil and natural gas platforms in federal waters. Alternate uses of platforms may include alternative energy production, aquaculture, and research and monitoring.

LNG installations, offshore wind and aquaculture

Agardy 10 Ph.D. in Biological Sciences, marine conservationist and the founder of Sound Seas

(Tundi, Ocean Zoning: Making Marine Management More Effective, p. 156)//BB

Massachusetts Oceans Act

The waters of Massachusetts are fast approaching those in the North Sea in terms of the ever-increasing kinds of uses and pressures. Conservationists in the northeast US have called the quickening pace of ocean development in this part of the Gulf of Maine ocean sprawl, and have pushed to find and support tools that facilitate rational planning and minimize risks to the marine environment.

So it was that the 2008 decision by the state of Massachusetts to pass legislation creating the first comprehensive plan for state waters in the US was met with much support. The plan covers marine areas to 3nm, taking into consideration fisheries, renewable energy production and marine conservation interests, among many others. Legislators in Massachusetts have said that with the pace of proposed developments in state waters, including liquefied natural gas installations, offshore wind turbines and offshore aquaculture, they no longer had the luxury of being able to react to each proposal in isolation.

AT: T Ocean ContextualContextual evidence

Day 12

(Jones, Japan launches the feed-in tariff system for renewable energy, Lexology, http://www.lexology.com/library/detail.aspx?g=b1972358-5a70-45e3-914c-9bf913a9e4d7)//BB

In a final recent development, the Japanese Government adopted a "green" innovation strategy setting priorities including new energy control systems (such as smart communities), storage batteries, ocean development (including offshore wind power), and "green" materials (including materials for wind power facilities). This newly developed "green" innovation strategy, together with the implementation of the FIT system, are expected to be a driving force in the revitalization of the Japanese economy.

EDUCATION: Oceanic offshore wind is the proxy for all future ocean development

Clean Technica 12

(Offshore Wind: the 21st Century Frontier, http://cleantechnica.com/2012/03/08/offshore-wind-the-21st-century-frontier/)//BB

Offshore Wind Development as a Whipping Boy

The regulations that offshore wind power must endure act like a whipping boy or proxy for all future ocean development. Judging by the popularity of ocean and submarine movies, there are many who recognize our seas contain a vast, yet largely unknown, world: mankinds new frontier that is far closer, with a long history, requiring less investment and perhaps more immediate returns than space. Offshore wind development is not only a major development into that frontier, but a test to see how we may limit or enhance that development with regulations. Imagine a space program with environmental regulations questioning rocket emissions.

American Rational for Offshore Wind

Offshore wind is expensive, so why make the investment? Europeans have had their answer for well over a decade. Should we, in America, just say no to new development? Some would have us move into the future by running hard and fast into the past. But as I have previously discussed, it may be more fear than leadership that drives such a perspective.

Offshore, we have more unused clear area for larger wind farms and much larger turbines. Connecting cables also have to contend with fewer rights of way than onshore. The air is less turbulent and the winds stronger. Overall, one source suggests that onshore wind tends to reach a maximum at about 30% efficiency with a 30% capacity factor (update April 26, 2012: new onshore wind turbines are achieving capacity factors of around 50%). Offshore, we may easily see 30% efficiency with a 50% capacity factor.

Forty-seven percent of the US population lives in the Eastern Time Zone. More than a third of the country lives on the Eastern Seaboard. Just offshore lies enough wind power to equal every power plant that has ever been built in the US (of any source of energy).

When we consider the Great Lakes region, the Gulf, and the West Coast, offshore wind potential is up to 4 times our present national power capacity. The economy tends to grow strongest on coastal areas. If we expect to not only replace coal-fired power plants but continue to meet growing energy demands, offshore wind is a massive resource that is close enough to where it is needed to fuel an energy boom and open the gateway to further ocean development.

Case extensionsCategorical exclusionCategorical exclusion for offshore wind allows for fastest development

Giddings, December 2011, J.D. candidate of Energy and Environmental Law (Nathaniel C., Go Offshore Young Man! The Categorical Exclusion Solution to Offshore Wind Farm Development on the Outer Continental Shelf, the George Washington Journal, http://gwujeel.files.wordpress.com/2013/07/2-1-giddings.pdf///JK)

In his remarks on the Deepwater Horizon disaster, the largest oil spill in American history,1 President Barack Obama stated, The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash Americas innovation and seize control of our own destiny.2 Despite this recognition, the United States is falling behind the rest of the world in clean energy technology and development.3 This Note looks at one way that the United States can reverse this trend: encourage development of offshore wind energy facilities on the Outer Continental Shelf by streamlining the environmental review process. Perhaps the best illustration of the need to streamline the permitting of offshore wind farms is the Cape Wind project in Nantucket Sound, Massachusetts. Cape Wind has been bogged down by legal challenges and approval processes since it applied for its first permit in November 2001.4 This 130-turbine project, which at its closest point will be 5.2 miles from land, would prevent approximately 880,000 tons of carbon dioxide emissionsthe equivalent of burning 570,000 tons of coaleach year.5 Environmental benefits aside, the project would also save the region about $185 million per year on electricity costs, or roughly $4.6 billion over the life of the project.6 Despite these savings, the Cape Wind project has undergo[ne] a more comprehensive and rigorous permitting review than any of New Englands fossil fueled power plants.7 Specifically, the Cape Wind project has been subject to two different environmental impact studies (EIS) under the National Environmental Policy Act (NEPA),8 eight lawsuits challenging the adequacy of the environmental review process, and a failed attempt by former Massachusetts Senator Edward Kennedy to provide the Governor of Massachusetts with veto power over the project.9 This opposition to Cape Wind seemingly ignores the federal governments finding that the project would have mostly negligible or minor impacts on the environment.10 Even though these findings were published in January 2009, and a favorable record of decision was published on April 28, 2010,11 construction has still not commenced.12 All of this has occurred despite eighty-four percent of Massachusetts residents and fifty-eight percent of Cape-area residents supporting the project.13 In stark contrast to the United States, European offshore wind farms have been in operation for the past eighteen years.14 With thirty-three operational projects in eight countries and five more countries planning to have operational offshore wind farms by 2015, Europes offshore wind industry is booming.15 More importantly, Europes sixty-five gigawatts of offshore wind capacity produced four percent of Europes energy and prevented the release of ninety-one million tons of carbon dioxide in 2008.16 The United States could learn from Europes successes and failures over the past twenty years to improve its own offshore wind farm approval regime. Specifically, the Obama administration should take a hard look at the environmental reviews that have been completed for offshore wind farms, both internationally and nationally. In doing so, the administration would discover that the negligible to minor environmental impacts of the Cape Wind project apply to nearly all offshore wind farms. As such, the U.S. Department of the Interior (DOI), Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) should create a categorical exclusion under NEPA for such projects. A categorical exclusion would, in most cases, eliminate the need for EISs and Environmental Assessments (EA) prior to issuing leases for the construction and operation of offshore wind farms in the United States. To prove this point, Part I of this Note discusses the differences between offshore wind farms and onshore wind farms. Part II describes the current regulatory framework for issuing leases on the Outer Continental Shelf to offshore wind farms. Part III examines the categorical exclusion generally: how it has been used and how the courts have reacted to it. Part IV demonstrates that a categorical exclusion is not only appropriate in the offshore wind farm context, but that it would survive judicial scrutiny. Finally, Part V discusses three alternatives to the categorical exclusion: (1) congressional action, (2) an agency rule that would allow for completion of EAs rather than EISs, and (3) a partial categorical exclusion, and reveals why these alternatives fail to address the problem as effectively as a categorical exclusion for offshore wind farms.

Offshore wind is environmentally safe and qualifies for a categorical exclusion empirics prove

Giddings, December 2011, J.D. candidate of Energy and Environmental Law (Nathaniel C., Go Offshore Young Man! The Categorical Exclusion Solution to Offshore Wind Farm Development on the Outer Continental Shelf, the George Washington Journal, http://gwujeel.files.wordpress.com/2013/07/2-1-giddings.pdf///JK)

As a preliminary matter, it is important to understand why using completed EISs and European environmental studies of offshore wind farms are appropriate to support a categorical exclusion. In its guidance document to federal agencies, Establishing and Applying Categorical Exclusions Under the National Environmental Policy Act, CEQ explicitly provided that (1) previously implemented actions[,] (2) impact demonstration projects[,] (3) information from professional staff, expert opinion, or scientific analyses[,] and (4) other agencies experiences may all be used to support a new categorical exclusion.117 Previous EISs fall under the first category,118 while European studies fall under the third category.119 In fact, European studies have already been used by BOEMRE to support its final rule for offshore wind farm leasing on the Outer Continental Shelf.120 Thus, compiling an administrative record using these scientific studies is accepted practice. The programmatic EIS for offshore alternative energy development concluded that offshore wind farms generally have negligible,121 minor,122 and moderate123 impacts on biological and physical resources.124 It also concluded that the potential for major125 impacts is limited to offshore wind farms impacts on endangered and threatened species.126 However, the potential for major impacts on endangered and threatened species should not prevent the issuance of a categorical exclusion for offshore wind farms because existing measures under federal law provide additional layers of protection for these species. Specifically, pursuant to section 7 of the ESA, where an agency action may impact threatened or endangered species, the agency is required to consult with the U.S. Fish and Wildlife Service (FWS) or the National Oceanic and Atmospheric Administrations National Marine Fisheries Service.127 A categorical exclusion for offshore wind farms would not remove this consultative requirement. In addition, BOEMRE would be required to conduct an EA if it found that any listed species could be impacted.128 Because there are built-in measures for ensuring that impacts on federally protected species are given proper consideration, this Note focuses on impacts to non-listed species, which would potentially suffer the greatest impact because they would have no extra-agency oversight should BOEMRE pass a categorical exclusion for offshore wind farms. An expansive 2009 study completed by the United Kingdoms (U.K.) Department of Energy and Climate Change concluded that there [were] no overriding environmental considerations to justify blocking offshore wind farms planned for construction and operation off the U.K. Coast.129 This study examined the potential impacts of offshore wind on all components of the marine environment including marine mammals, migratory birds, fisheries and other biota, and benthos.130 The impacts assessed included, but were not limited to, seismic and acoustic disturbances, obstruction/collision risks to migratory paths and other movements, and habitat changes.131 The report recommended a cautionary approach to the development of offshore wind resources.132 A CER satisfies the cautionary principles outlined in the U.K. study by providing for an assessment of every projects individual and cumulative impacts and ensuring additional environmental review where warranted. Thus, implementing a categorical exclusion in the United States would be consistent with the recommendations of the U.K. study. Similarly, a Danish study evaluating fifteen years of experience with the worlds two largest offshore wind farms found limited environmental impacts. The study concluded that offshore wind farms, if placed right, can be engineered and operated without significant damage to the marine environment and vulnerable species.133 Thus, even large offshore wind farms, if properly sited to avoid cumulative impacts associated with spatial issues, pose limited risks to the environment.134 From this study, it becomes clear that if the United States is mindful of cumulative impacts in the offshore wind leasing process, the environmental impacts of these projects will be minimized. Because the CER specifically takes into account cumulative effects on federally protected species and the environment,135 an EA would be prepared in the event that a CER determined that such cumulative effects were significant.136 In addition to these large-scale studies, the Final EIS for the Cape Wind project found that the project had potential to cause major impacts only on marine birds and visual resources.137 However, neither of these potential major impacts would prevent BOERME from promulgating a categorical exclusion. The only possible major impact to marine birds was on the roseate tern, an endangered species.138 As an endangered species, the tern is protected by the ESA, and as such, any potential harm to this bird would be properly assessed under the section 7 consultation process before an offshore wind farm could be built.139 With regard to the potential for major visual impacts, aesthetic concerns are not an overriding concern for the majority of citizens nor would they alone trigger the NEPA process.140 Moreover, studies have shown that property in close proximity to wind farm projects, onshore or offshore, does not lose value.141 Because the rest of the impacts range from negligible to moderate,142 the final EIS for Cape Wind similarly supports a categorical exclusion for offshore wind farms. The European studies and EISs discussed in this Subpart show that offshore wind farms present no overriding environmental considerations143 that would justify stopping their development. Although some environmental concerns remain regarding the development and siting of these facilities, they are not so pervasive that a categorical exclusion would pose a significant threat to the human environment. The United States should draw on the vast experiences and data available and issue a categorical exclusion for offshore wind farms.

Alternative methods are lacking categorical exclusion solves best

Giddings, December 2011, J.D. candidate of Energy and Environmental Law (Nathaniel C., Go Offshore Young Man! The Categorical Exclusion Solution to Offshore Wind Farm Development on the Outer Continental Shelf, the George Washington Journal, http://gwujeel.files.wordpress.com/2013/07/2-1-giddings.pdf///JK)

Some may argue that this proposal goes too far, that it eviscerates the purpose of NEPA or that more research is needed before acting in such a broad manner. However, failure to expedite the offshore wind farm siting process will lead to both an increased risk of harm from global climate change and the United States falling further behind the rest of the world in offshore wind energy development and utilization. Three possible alternatives to this Notes categorical exclusion proposal are (1) the creation of a categorical exclusion by Congress for offshore wind farms, (2) the use of EAs until the environmental impacts of offshore wind farms are better understood, and (3) the creation of a partial categorical exclusion for the Site Assessment Plan (SAP) portion of the lease process. This Section discusses each of these alternatives and reveals why each fundamentally fails to expedite the process in an appreciable manner. None of these alternatives would ameliorate one of the most significant hurdles facing offshore wind: the time-intensive process required to bring an offshore wind farm into operation. A. Congressional Action. Although a congressionally enacted categorical exclusion could be immune to judicial review,146 this alternative has several significant drawbacks. First, Congress has historically avoided creating categorical exclusions for entire classes of non-administrative activities; it is much more likely to do so for specific projects.147 Second, none of the recently stalled climate bills propose a categorical exclusion for offshore wind energy development.148 Third, the political climate in Washington makes it such that any congressional action on this issue is unlikely.149 Consequently, this Notes proposal is more likely to occur and, therefore, is superior to a congressionally enacted categorical exclusion. B. Environmental Assessments Another alternative is that BOEMRE could amend the current regulatory scheme through notice and comment rulemaking to require one or two EAs rather than two environmental reviews (at least one of which will be an EIS) for offshore wind farm construction and operation activities on the Outer Continental Shelf. As discussed, BOEMRE left open the possibility that it would do this in the future. Starting with an EA rather than an EIS would decrease the amount of time required for some projects.150 However, this solution would, in effect, be requiring an EA for offshore wind projects where one is not necessary; environmental studies have shown that offshore wind farms generally do not have significant impacts. Because this Notes solution would ensure that only those projects that truly warrant further environmental review complete an EA, it is superior to an alternative that requires one or two EAs for every project, regardless of what the likely environmental impacts will be. C. Partial Categorical Exclusion The third and final alternative to this Notes proposal is that BOEMRE could promulgate a categorical exclusion for only those activities associated with the SAP phase of the leasing process. As mentioned, this phase includes constructing meteorological towers that collect data on environmental factors that are critical to determining whether a site is appropriate for an offshore wind farm. The American Wind Energy Association (AWEA) proposed creating a categorical exclusion for SAP activities in its comments to BOEMREs draft rule regarding the use of alternate energy on the Outer Continental Shelf.151 AWEA argued that because BOEMRE has already reviewed subsea surveying and [meteorological] tower installation in its [Programmatic Environmental Impact Statement] . . . [and] concluded that subsea surveys are likely to have negligible environmental impacts and that installation of a typical meteorological tower is unlikely to cause a significant environmental impact, requiring an EIS for a typical wind farm SAP was wholly unjustified.152 Despite these arguments, BOEMRE decided to reject this proposal when it promulgated its final rule.153 Additionally, although this proposal would likely withstand legal challenges because similar activities fall within a categorical exclusion, it would only shorten the offshore wind farm approval process by one year.154 Creating a categorical exclusion for offshore wind farms has the potential to take even more time off the development process and is able to do so without negatively impacting the environment. Although a partial categorical exclusion is arguably more politically palatable, it is also less effective at trimming the waiting period for bringing an offshore wind development online.

One-stop permittingReforming the permitting process is key Massachusetts provides an opportune model for streamlined development

Kimmel*, and Stalenhoef**, 10-10-2011 *Commissioner of the Massachusetts Department of Environmental Protection **Counsel for the Massachusetts Department of Public Utilities

[*Kenneth, *Dawn, The Cape Wind Offshore Wind Energy Project: A Case Study of the Difficult Transition to Renewable Energy, Golden Gate University Environmental Law Journal, Volume 5 Issue 1, http://digitalcommons.law.ggu.edu/cgi/viewcontent.cgi?article=1073&context=gguelj]

The Cape Wind saga reveals that the current permitting process for offshore wind energy projects is broken. If the nation is serious about developing offshore wind energy projects along its coasts, Congress must advance reform. One place to look for inspiration, ironically, is Massachusetts. Despite its reputation for long and protracted siting battles, Massachusetts has instituted two major reforms that could serve as models for federal reform of offshore wind-project permitting.

The first model reform is a one-stop permitting law that enables the State Energy Facilities Siting Board to issue a single permit and eliminates the need for any additional state or local permits.85 Enacted during the energy crisis of the early 1970s, this law ensures that state and local agencies do not block power plants and infrastructure needed for a reliable energy supply. The law allows the Siting Board to step in when an energy project proponent is denied a necessary permit or experiences significant delays, including those caused by litigation.86 The Siting Board has broad representation: it is composed of the Executive Office of Energy and Environmental Affairs, the Department of Environmental Protection, the Department of Energy Resources, the Department of Public Utilities, and three citizen members representing labor, environmental, and consumer interests.87 It has wide jurisdiction and can review all of the various impacts of energy facilities that would be examined by state or local permitting agencies. It may also receive the input of all state and local agencies that would otherwise be called upon to grant permits.88 This authority ensures that all issues and all possible objections are heard once, rather than multiple times by multiple agencies. And unlike with most permits issued by state agencies, the appeals process is streamlined. Indeed, there is but one appeal of a Siting Board approval, which goes directly to the state Supreme Judicial Court.8

As noted above, this law was crucial to the success of Cape Winds permitting on the state level, because it ensured that the permitting of the electric cables would not get bogged down in other state and local level permitting, or be delayed by judicial appeals of such permit decisions. Had this law not been in place, it is likely that Cape Wind would still be in litigation with the Cape Cod Commission over its denial of the electric cables and would be defending the license issued by the Department of Environmental Protection allowing the cables to be placed in Massachusetts tidelands.

There is no comparable one-stop permitting option for offshore wind projects available at the federal level. While the EPACT established that the MMS (now referred to as the Bureau of Ocean Energy Management, Regulation, and Enforcement, or BOEMRE) plays the leading-agency role for issuance of an offshore lease, numerous other federal agencies such as the Army Corps of Engineers, Environmental Protection Agency, Federal Aviation Administration, and the Coast Guard will still need to issue separate approvals for the project. Federal agencies, including the U.S. Fish and Wildlife Service, National Park Service, and the Advisory Council on Historic Preservation, will also play significant consultative roles. Rather than having the appeals of the permits lodged in one court, federal law provides for multiple appeals in various federal courts that will have to be resolved before the project can finally proceed. This multiplicity of permitting and consultative agencies, and numerous potential judicial appeals, is a formula for delay, confusion, redundancy, and inconsistency. In short, it is a boon for the forces of inertia.

A second key reform in Massachusetts occurred after Cape Wind entered the scene. Some objected to Cape Winds proposal because there was no planning process that preceded the project. Instead, as noted, Cape Wind essentially staked out its ground and then requested permits.

To reform this so-called ad hoc approach, the Massachusetts legislature passed the Oceans Act of 2008.90 The Act directed the Secretary of Energy and Environmental Affairs to prepare an ocean plan to govern the uses of Massachusetts coastal waters.91 Among other things, the Act allowed for offshore wind facilities to be constructed in Massachusetts waters, provided they are of appropriate scale and are consistent with the plan.92

To devise the plan, the Secretary empanelled two stakeholder advisory groups, held approximately eighty public hearings in coastal communities, and collected extensive data on the current uses of the coastal waters. In addition, the Secretary identified areas containing important commercial and recreational fisheries, significant marine mammal habitats, navigational channels and rare bird habitats.93 All of this data was layered in GIS mapping systems that graphically depicted the areas where offshore wind turbines should not be located so as to avoid conflict with competing uses. The mapping revealed that there were two large areas not encumbered by these incompatible uses; an area southwest of Marthas Vineyard, and an area to the west of the small town of Gosnold.94 The plan provides that a commercial-scale offshore wind facility is presumptively appropriate in these areas and entitled to state permits.95 While any project in these areas would still need to obtain state and local permits, the permits would be a mechanism to impose conditions upon the use, rather than deny it altogether.96 In essence, the ocean plan is akin to the zoning of coastal waters, such that the designation of certain areas within the coastal waters creates zones where wind energy can be pursued as of right (e.g., without the need for a permit or variance).9

The advantages of a planning/zoning model over ad hoc permitting are manifest. The planning/zoning process is deliberate and involves the public in decision-making. The process encourages the examination of a wide range of alternative sites and is designed to select the best locations. Once the best locations are selected, the developer is assured of a predictable outcome.

The federal governments process, in contrast, is still driven by the project proponents individual choice of sites. While there is now a leasing process administered by BOEMRE, the primary function of BOEMRE is to select a lessee that offers the best financial bid.98 There is no statutory ocean planning authority under federal law with an agency empowered to make zoning/planning designations of appropriate sites for offshore wind projects. Nor is there any process to assure developers that if they select certain sites and abide by known performance standards, they will receive a permit.99

Thus, the Cape Wind experience both highlights the need for reform and provides models for the types of reform that are needed.

Streamlining permits reduces startup time and drives down costs to investors

Van der Palen 5 Client Development Consultant Customer Contact at National Office of Entrepreneurial Netherlands, Previous Advisor & Coordinator KCC by NL Agency, NL Agency Knowledge Strategy Director at NL Agency. Trained at Tilburg University.

Leon van der Palen, work package 3: legal and administrative issues, Concerted Action for Offshore Wind Energy Deployment (COD). 2005. http://www.offshorewindenergy.org/cod/Final_COD_report_legal_frameworks.pdf

A so-called one - stop - shop offers one main point of contact, the main competent authority involved, which has efficient and effective communications lines with other relevant authorities. The one-stop-shop is mandated to make decisions, informed by opinions from experts on the subjects of, for instance, legal issues, or environmental impacts. This is regarded as streamlining procedures and to some extent as a way to expedite these procedures. The number of permits required to develop an offshore wind farm should not constitute an obstacle to intending developers, as long as it is clear to applicants what permits are required, in what order these must be applied for and what information must be supplied and at what time. The streamlining of procedures for permits, close co-ordination and the possibility to apply for different permits simultaneously will help to make the application process run smoothly. Evaluation and comparison of consent regimes and experiences, will lead to valuable know-how that should be shared among the COD members. And what we have seen in this study is that some of the COD countries have had experiences with the concession of sea areas for wind energy development, and that some of them have already altered their authorisation procedures based on these experiences. It is premature to evaluate the outcome of these and future actions, and specifically to decide whether there is a reduction of regulatory and non-regulatory barriers to increases in renewable electricity production. However, the idea to streamline procedures originated from the perception that these procedures pose a bottleneck. Many countries have taken early action in this respect, and the question arises whether, in these cases, consent regimes remain a bottleneck for the (fast) development of offshore wind energy. As a result of research, the exchange of information and experience, countries are now building up a body of knowledge, for instance, on the environmental effects of offshore wind energy. Based on this body of knowledge authorities could, in the future, consider reducing both the amount and the nature of the information to be supplied by applicants, and standardising research methods. This standardisation on an international level will, for instance, promote the insight into the accumulation of environmental effects and may lead to the pre-selection of suitable sea areas internationally. However, the exact interpretation of streamlining in the EC Renewables Directive is not yet made, but, for example, a one-stop-shop would appear to qualify, and certainly seems desirable.3 When evaluating whether MSs have met this part of the Directive, evaluation criteria could include: n A reduction in development lead times; n Consent of high quality projects; n Reducing the cost of gaining permits; n Reducing the cost of issuing permits.

Streamlining permitting is key to short timeframe and investment

Du Houx 10, owner of Consultancy PR and writer for Maine Insights

Ramona du Houx, Offshore wind could happen sooner, as streamlined permitting is due to change March 21, 2010, http://maineinsights.com/perma/offshore-wind-could-happen-sooner-as-streamlined-permitting-is-due-to-change#sthash.ot84tXvj.dpuf

The policy is a turnaround from the Bush administration, which made offshore-wind permitting onerous. Since Maines coastal wind potential was confirmed as being equalivant to the energy of 149 nuclear power plants, the state has been aggressively working to develop offshore wind. There are no offshore wind platforms anywhere in America. Europe has over 800 offshore wind platforms. Europe is ten to fifteen years ahead of us, said Habib Dagher, director of UMaines Advanced Structures and Composites Center. Federal regulations have stifled offshore-wind development. Right now it takes up to nine years to get permits from the federal government for offshore-wind projects. Well never compete with the world, as the president has said he wants, with the current offshore-wind regulations. Secretary Salazars commitment to streamline the federal regulation permitting process will change that. Dagher is the driving force behind Maines research and development in wind technology. Last December, Maines Ocean Energy Task Force announced demonstration sites for offshore-wind technology located in Maines coastal waters, including a special test site for the University of Maine, off Monhegan Island. Daghers goal for his UMaine team is to have the first offshore, floating, demonstration turbine in operation by 2011. UMaines DeepCwind Deepwater Offshore Wind Consortium, which Dagher helped form, has already been awarded $25 million of federal support to expand efforts to develop offshore-wind capacity. Governor Baldacci explained at a Washington, DC press conference the steps the state has taken to become New Englands largest land-based, wind-energy producer. He said working with communities across Maine has helped. I believe very strongly in the potential of offshore wind in Maine. We have 38,000 miles of coastline, and our Ocean Energy Task Force has permitted four offshore wind test sites in state waters. Weve been able to do it with the support of the fishing community, conservationists, and environmentalists, said Governor Baldacci. Maine has strong potential to become a national leader in offshore-wind development, and the federal support for our efforts is critical, especially in regards to streamlining permitting. For companies wanting to invest in offshore wind, they can breath a sigh of relief. No business wants to be held up by federal regulations. Having the commitment of the federal government to streamline the regulation process opens the door for investors looking to be a part of the offshore, green-energy economy. Its ridiculous that a nuclear power plant takes half the time of a deep-sea wind project. They estimate that it takes seven to nine years for a deep-sea wind project under current federal regulations, and its less than four years for a nuclear power plant. I think their priorities have been in the wrong places, said Baldacci. Secretary Salazar, Secretary Chu, and the President all are committed to reworking the regulations for offshore wind. All the members of the Atlantic Wind Consortium, from Maine to Florida, will be working with Secretary Salazar to streamline these regulations. We all want the same thing, expedited treatment. Developers, communities and states need to have that assurance. For Maine it means that construction of offshore wind platforms could happen sooner than planned. Its a huge step, said Dagher. With streamlined federal permitting, Im sure the commercial platforms that will be built in federal waters will happen a lot sooner than projected. I want to commend the governor for speaking out strongly on Maines behalf for wind development. Without his help we wouldnt be this well positioned.

One stop permitting empirically solves over-regulation

Bondareff 12 Legal practitioner with a focus on legislative energy disputes, transportation, and environmental issues.

[Joan Bondareff. Is The Timing Right To Expedite Offshore Wind? North American Wind Power , July 2012 http://www.blankrome.com/siteFiles/Publications/F816661C9B5373A56CC3F2217201367B.pdf]

Congress can also help by reviewing the Energy Policy Act of 2005 and determining whether one-stop permitting is a viable option for offshore wind. The U.S. still maintains a balkanized energy model, with permitting authority divided among many federal agencies and state governments leading, not surprisingly, to little results. Congress can look to the Ocean Thermal Energy Conversion Act of 1980 and to the Ballast Water Management regime adopted by the House of Representatives in the Coast Guard and Maritime Transportation Act of 2011 to see models where one-stop permitting has created a level playing field for industry across state borders.

One-stop permitting minimizes barriers to development-Denmark proves

European Commission 10 The European Commission is the EU's executive body and represents the interests of Europe as a whole (as opposed to the interests of individual countries).The Commission's main roles are to: set objectives and priorities for action propose legislation to Parliament and Council manage and implement EU policies and the budget enforce European Law (jointly with the Court of Justice) represent the EU outside Europe (negotiating trade agreements between the EU and other countries, etc.).

Denmarks offshore wind farms planning and policy approach DK 8/23/2010 http://ec.europa.eu/ourcoast/index.cfm?menuID=8&articleID=97

8. Effectiveness (i.e. were the foreseen goals/objectives of the work reached?) Denmark has smoothly run, and expanded, its offshore wind energy programme for nearly 20 years. 9. Success and Fail factors The Energy Agency acting as a one-stop-shop for the operators is ensuring a smooth licensing procedure, where the interests of other authorities is managed internally, thus minimizing the administrative work of the operators. Also the previous investment in the extensive environmental monitoring programme has increased the level of knowledge and consequently minimised uncertainties for the operators on a number of issues. To further develop this knowledge base a smaller follow up programme has now been initiated. Experience gained during the first EIA procedures have shown that the authorities concerned, interest organisations and citizens all use the public consultation of EIA reports to present comments that contribute to the final definition of the wind farm projects. 10. Unforeseen outcomes One of the challenges that has to be faced in the future is an assessment of the cumulative impacts from multiple offshore wind farms. This is among other initiatives faced via the initiation of new environmental monitoring projects regarding cumulative effects on divers and harbour porpoises, where also impacts from other activities at sea are included.

ITCA long-term investment tax credit catapults the offshore wind industry transitions the US to a green economy

Sopko 13 JD, former legislative council @ House of Reps

(Nancy, Offshore Wind Needs a Boost from Congress, http://oceana.org/en/blog/2013/11/offshore-wind-needs-a-boost-from-congress-0)//BB

Like so many of us, Oceana has seen the damage that the drilling for and burning of fossil fuels can do to the health of our oceans and marine life. In fact, just last May, for the first time in history, the Earths atmospheric carbon dioxide levels reached 400 parts per million (ppm). This ominous milestone is a stark reminder of what our stubborn dependence on fossil fuels is doing to our planet. Such dangerous levels of carbon dioxide in the atmosphere are bringing us ever closer to the point of no return, and we are already witnessing its disastrous effects. Hurricanes, tornados, tropical storms, and superstorms have increased in both severity and frequency. These storms are the alarm bells of climate change. We have no choice but to act swiftly and immediately to drastically reduce the level of carbon dioxide were pumping into the Earths atmosphere. In that vein, Congress must move aggressively to incentivize clean energy development. Specifically, the development of domestic offshore wind will reduce our dependence on polluting fossil fuels and go a long way in combating global climate change. The scale of Americas offshore wind energy resource is truly staggering, with literally thousands of gigawatts of clean energy available off our shores. According to the Department of Energy, the U.S. has enough offshore wind energy potential to power the country four times over. But like other burgeoning industries, one of the biggest impediments to offshore wind development is financing. The most critical federal tax incentive to help jumpstart a thriving offshore wind industry is the long-term eligibility of an Investment Tax Credit (ITC). The long investment time for offshore wind, the infancy of the industry and higher initial costs make financing for offshore wind different from onshore wind. Investors need a quicker return on such a long-term investment, which is why the Investment Tax Credit (ITC) is advantageous for offshore wind projects. If the U.S. wants to invest in offshore wind, a long-term extension of the ITC for offshore wind is necessary. To that end, Senators Tom Carper and Susan Collins and Reps. Bill Pascrell and Frank LoBiondo have introduced bipartisan legislation (S.401 and H.R.924, respectively) that will extend the ITC to the first 3,000 MW of offshore wind installed. This extension will provide certainty to investors that this clean energy resource has the support of the federal government for years to come. Such long-term tax certainty will make offshore wind an affordable, viable investment and will ultimately help to catapult this burgeoning industry into the mainstream. Congress needs to pass this legislation immediately, or provide a long-term extension of the ITC via tax reform or an extenders package, so that we can swiftly transition to a clean energy future. We can no longer afford to do nothing. We have already surpassed the acceptable upper limit of carbon dioxide in the atmosphere. The longer we continue with business as usual, the harder it will be to correct the damage we have done.

Current tax incentives are insufficient and uncertain

Giordano 10 JD, served four years of active duty in the United States Navy as a Surface Warfare Officer where he gained unique training, experiences, and insights for working with people and solving complex problems

(Michael, ALLEN CHAIR ISSUE 2010: ENVISIONING ENERGY: ENVIRONMENT, ECONOMICS, AND THE ENERGY FUTURE: COMMENT: OFFSHORE WINDFALL: WHAT APPROVAL OF THE UNITED STATES' FIRST OFFSHORE WIND PROJECT MEANS FOR THE OFFSHORE WIND ENERGY INDUSTRY, 44 U. Rich. L. Rev. 1149)//BB

Offshore wind projects in Europe address financial challenges with government market "mechanisms such as feed-in tariffs and tax credits to make offshore wind development more attractive to investors." 32 Currently, the United States does not offer similar incentives specifically to offshore wind developers. 33 Wind energy does receive an incentive in the form of a production tax credit ("PTC") for electricity produced from renewable sources. 34 The PTC provides a financial tax credit for each kWh produced from qualified energy sources by an electric utility and sold to consumers. 35 The current PTC is $ 0.015 per kWh, 36 which amounts to $ 0.021 per kWh after adjustment for inflation. 37 While this amount of credit does help a little, it is not enough to bridge the gap when coal costs $ 0.02 to $ 0.03 per kWh, and offshore wind energy costs more than $ 0.08 per kWh. 38 The American Recovery and Reinvestment Act of 2009 ("ARRA") extended the PTC for three more years through December 31, 2012. 39 The extension of the PTC is vital to encouraging investment in offshore wind energy, [1155] but investors cannot attain full confidence when incentives like the PTC expire every three to four years. 40 The ARRA also gives wind energy developers the ability to claim a 30% investment tax credit ("ITC") in lieu of a PTC for facilities placed online from 2009 to 2012. 41 The ITC then qualifies for conversion into a grant from the U.S. Department of the Treasury. 42

ITC will boost the US economy by creating jobs and boosting the manufacturing and renewable energy sectors

Markey et al, 2013, Unites States Senator of Massachusetts.

(Ed, with 23 Senate Colleagues, "Ed Markey Leads 28 Other Senators in Calling for Renewal of Clean Energy Tax Incentives," http://www.dailykos.com/story/2014/03/27/1287824/-Ed-Markey-Leads-28-Other-Senators-in-Calling-for-Renewal-of-Clean-Energy-Tax-Incentives#)

Dear Chairman Wyden and Ranking Member Hatch:

The nations tax code is in need of comprehensive reform, and we support your continued efforts to ensure that our tax code better reflects Americas priorities and values. However, as we approach the end of the calendar year, many tax programs that are critical for creating jobs, deploying clean energy, and cutting pollution are facing expiration. If a broader tax code overhaul cannot be achieved by years end, it is imperative that these key clean energy tax incentives are renewed as soon as possible.

In recent years, provisions like the production tax credit and the investment tax credit have helped technologies like wind and solar create tens of thousands of American jobs and generate an increasing share of Americas power. These tax credits have helped scale up production and drive down the cost of clean energy technologies. They remain critical to addressing the market failures that prevent cost-effective, market-ready technologies from being deployed to their full potential. With continued support, clean energy will help Americans save money on their energy bills and reduce harmful pollution.

The tax incentives below have a demonstrated history of providing strong economic and environmental benefits. They have garnered bipartisan support. In the context of a tax code that has permanent tax entitlements to oil and gas, nuclear, and other energy technologies, these programs merit permanent or long-term extensions. At a minimum, they should each be extended in the short term or until a more comprehensive tax reform agreement is in place.

Section 45 Renewable Electricity Production Tax Credit (PTC). This provision, which is set to expire at the end of the year, has been a critical tool to support investments in wind, biomass, hydropower, geothermal, landfill gas, municipal solid waste, hydrokinetic power, anaerobic digestion, tidal energy, wave energy, and ocean thermal energy. In the wind sector alone last year, the credit drove $25 billion in private investment and led to the installation of more than 13,000 megawatts of new production capacity, enough to power more than 3 million American homes. Allowing this credit to expire for wind production would threaten more than 80,000 jobs across nearly every state.

Section 48 Investment Tax Credit (ITC). This tax credit traditionally supports the deployment of solar heating and electric generation, fuel cells, combined heat and power systems, small wind, geothermal heat pumps, and microturbines. Under current law, an offshore wind project will also be eligible for the ITC if that project commences construction before the end of 2013. While the National Renewable Energy Lab has estimated that the United States has more than 4,000,000 megawatts of untapped offshore wind potentialenough to meet the power needs of the entire nationthere are currently no offshore wind facilities operating in U.S. waters. This is due in large part to the long planning horizon of these projects and the short-term nature of the tax credits. A long-term extension of the ITC for offshore wind is needed to jumpstart this industry. Additionally, changing the applicability of the ITC from projects that are operational by the expiration date to projects that have commenced construction would make the tax credit consistent with the PTC and help drive the deployment of thousands of megawatts of additional new solar capacity. This change would allow the American solar industry, which has grown from 15,000 employees in 2005 to 120,000 today, to continue creating jobs in the United States.

Legislative changes promote the industry

Obey 13 Senior Editor, Inside EPA Clean Energy Report at Inside Washington Publishers

Doug, Touting industry's viability, offshore wind backers seek new tax credit, EPAs Clean Energy Report, ProQuest

A bipartisan group of lawmakers is backing legislation to create a new short-term investment tax credit (ITC) for the nascent offshore wind industry, with proponents at the same time touting a report projecting that the sector can compete with natural gas-fired generation within the next decade without government subsidies. Sen. Tom Carper (D-DE), Sen. Susan Collins (R-ME) and 10 others Feb. 28 introduced S. 401, which provides a tax credit for the first 3,000 megawatts (MW) of offshore projects placed in service, including those in coastal waters and within inland navigable waterways like the Great Lakes. The bill requires that those receiving the credit complete the project within five years. A Senate source says the bill is essentially the same as a measure offered in the 112th Congress, which was cosponsored by since retired Sen. Olympia Snowe (R-ME). Reps. Bill Pascrell, Jr. (D-NJ) and Frank LoBiondo (RNJ) have introduced a companion bill in the House, and both bills have been sent to committee. Prospects for both the Senate and House measures remain murky, as sources are skeptical about substantive energy legislation moving in the divided Congress and broader questions about the fate of tax reform efforts, which are still in the early stages. Offshore wind developers can already receive either a renewable energy production tax credit, which is based on energy produced, or a renewable ITC, which is based on funds invested, but sources say the proposed offshore wind ITC is critical to enabling an emerging industry with long project lead times planning certainty, while also being targeted enough so as not to require long-term tax breaks. Carper in Jan. 31 remarks at the Center for American Progress (CAP) in Washington, DC, cited the 3,000 MW limit as a cost-limiting mechanism that still provides certainty for multi-year planning by offshore wind developers. "We ought to do that kind of thing with more of our tax code," Carper said. In a Feb. 28 memo, CAP's Michael Conathan argues that "[b]y granting the tax credit to a set amount of energy generation capacity rather than having the credit expire on a specific date, this bill removes the pressure for developers to act before they're ready and ensures the early stages of offshore wind development will receive adequate and appropriate financial assistance regardless of when construction begins."

Extension of federal tax credits are key to offshore wind production

Wyman, December 2013, M.A. of Science and Engineering (Constance, Why the ITC Matters For Offshore Wind, North American Wind Power, http://www.nawindpower.com/issues/NAW1307/FEAT_03_Why_The_ITC_Matters_For_Offshore_Wind.html///JK)

Over the last few years, there has been much discussion about the role of tax credits in the wind industry and whether there should be offshore-specific incentives. With federal tax reform on Congress agenda, it is relevant to examine the implications of these policies. The sunsetting of tax incentives is an ongoing concern for the wind industry as a whole, but it is particularly problematic for the nascent offshore wind sector. Offshore wind projects take multiple years to plan and permit. For example, it took nine years for the Cape Wind project to receive a favorable record of decision, which will ultimately allow the developer to begin construction of the 468 MW offshore wind project in Nantucket Sound. As regulations become clearer, permitting requirements more streamlined and infrastructure plans more concrete, the time to plan and develop offshore wind projects will decrease. However, the development process will still be longer for offshore wind projects than for onshore wind projects. One reason for the long timeline is that existing state permits allow up to seven years from initial leasing to the start of electricity generation, due to the assessments, logistics and planning required for offshore projects. The extension of the production tax credit (PTC) and the investment tax credit (ITC) which allows projects to qualify for the PTC or ITC if they begin construction by Jan. 1, 2014 is a step in the right direction, as is the passage of the Incentivizing Offshore Wind Power Act, which was reintroduced in February by Sens. Tom Carper, D-Del., and Susan Collins, R-Maine. The legislation would provide a 30% ITC for the first 3 GW of U.S. offshore wind projects. Once awarded a tax credit, companies would have five years to install the offshore wind facility. Companies would not be able to receive other tax credits in addition to the offshore wind ITC. Financial modeling In order to determine how tax credits would affect the offshore wind industry, financial models projected the capital and total costs for three hypothetical wind projects. Next, a cashflow was used to calculate the net present value (NPV) of the projects under different conditions. Then, a series of mathematical experiments was used with the cashflow to determine equations for the NPV from the hypothetical project scenarios. The basic projects modeled include specific assumptions about configurations and components that were based on publicly available real-world data. Two hypothetical offshore wind farms were modeled for this analysis. Project 1 was a 500 MW project consisting of 5 MW turbines, and Project 2 was a 300 MW project containing 3 MW turbines. Each project featured monopile foundations. The hypothetical project sites were located six nautical miles offshore in 22.5 meters of water, and the projects expected lifetimes were 20 years. (Many of the projects currently planned in U.S. waters use other types of foundations. However, at the time of the models development, only monopile cost information was available.) Although many factors influence project costs and returns, this analysis found that some factors far outweigh others. The equations that were generated to calculate the NPV for the sampled data contained five variables: capacity factor, average mean wind speed, electricity price, capital cost (CAPEX), and operations and maintenance expenses (OPEX). Although many factors influence project costs and returns, this analysis found that some factors far outweigh others. Each variable was considered independent of the other four. Other factors, such as the size of the project, were considered fixed once these decisions were made. This was done in order to focus on the variables that create uncertainty in other words, the factors that influence the financial outcome of the project but for which project decision-makers have little or no control. In markets where offshore wind projects can obtain a contract that sets a purchase price for the electricity, it is possible to remove the price uncertainty. A third hypothetical project, Project 3, was structured in the same way as Project 1 but with a fixed electricity price of $0.155/kWh. This price was selected because it is halfway between the mean and high price values used in the rest of this analysis. Estimating tax-credit implications Three tax scenarios were modeled using the aforementioned process to generate sets of equations for the NPV for each project. The equations all had the same form but different coefficients for each variable. The first scenario assumed that no wind-specific tax credits existed. Second, a PTC worth $0.022/kWh was assumed and taken for the first 10 years of electricity generation. The last scenario assumed an ITC of 30%, available to be claimed in the year that new equipment was placed in service. Specifically, this scenario allowed the developer to take this credit in the first year that the wind farm went into service and assumed that no other new equipment would be installed during the life of the project. The second and third scenarios were modeled after existing tax credits available to the wind industry. Once the equations were generated, 1,000 combinations of the five significant variables were created using a random number generator for each project. Then the NPV for each set of variables was calculated, generating a set of 1,000 possible outcomes for each tax scenario. The chart below shows the range and means for each of the five input variables, where OPEX and CAPEX are shown in millions of dollars. The results Of the 1,000 sample data combinations for Project 1, 26.9% generated a positive NPV without any tax credit. This percentage increased to 43.8% with a PTC and to 57.3% with an ITC. Electing the ITC allowed 30.4% more of the potential project outcomes to have a positive result, which is more than double the positive results that would occur with no credit claimed. Of the 1,000 sample data combinations for Project 1, 26.9% generated a positive NPV without any tax credit. This percentage increased to 43.8% with a PTC and to 57.3% with an ITC. Electing the ITC allowed 30.4% more of the potential project outcomes to have a positive result, which is more than double the positive results that would occur with no credit claimed. When the price was fixed at $0.155/kWh for Project 3, 44.1% of samples generated a positive NPV without a tax credit, 62.9% had a positive NPV with a PTC, and 79.2% had a positive NPV with an ITC. In the price-fixed scenario, claiming an ITC allowed 35.1% more positive outcomes than not claiming a tax credit at all. For Project 2, 31.7% of outcomes were positive without a tax credit, 41.3% were positive with the PTC, and 54.2% were positive with the ITC. Choosing the ITC resulted in 22.5% more positive outcomes than having no credit. Table 2 shows a summary of the results from the entire analysis. Nearly every outcome generated a higher NPV by opting for the ITC rather than the 10-year PTC. In fact, only seven of the 3,000 total samples 1,000 per project resulted in a higher NPV by taking the PTC, and the maximum higher NPV from the PTC was only $12.16 million higher. In contrast, choosing the ITC resulted in higher NPVs of up to $468.54 million above the return using the PTC. Choosing an ITC instead of a PTC resulted in an NPV that was an average of 14.2% higher. Nearly every outcome generated a higher NPV by opting for the ITC rather than the 10-year PTC. In fact, only seven of the 3,000 total samples 1,000 per project resulted in a higher NPV by taking the PTC, and the maximum higher NPV from the PTC was only $12.16 million higher. In contrast, choosing the ITC resulted in higher NPVs of up to $468.54 million above the return using the PTC. Choosing an ITC instead of a PTC resulted in an NPV that was an average of 14.2% higher. These results clearly show that an ITC allows for the highest percentage of positive outcomes from a given offshore wind project. However, this process does not consider whether these hypothetical projects would be considered for planning and construction. Real-world projects would have a higher percentage of positive NPV results because of site selection and project-specific planning decisions that would eliminate poorer choices. Although these were hypothetical scenarios and not real-world projects, it is clear that tax incentives for offshore wind help the embryonic U.S. offshore wind industry by allowing a higher percentage of the potential outcomes of a project to be positive. Having a positive mean NPV for a project does not necessarily make it financially appealing. However, the shift toward higher returns and a greater percentage of positive outcomes allowed by tax incentives reduces the financial risk and allows more projects to move into a range where investors and financiers would be interested. If PTCs and ITCs are authorized only for periods of time that are shorter than the time required to plan offshore wind projects, then the tax credits cannot be considered when assessing the financial viability of the projects. In order for tax credits to be useful to the offshore wind industry, they need to be extended through 2020 or beyond. Both the ITC and PTC aid the financial viability of offshore wind projects by reducing the chance of negative returns, but the ITC provides a greater increase in positive NPV. In 99.7% of the results, the ITC allowed a higher project value. Simply put, the ITC is of greater value to the offshore wind industry.

99.7% of studies prove ITC increases net price value of offshore wind projects

Wyman, 2013, graduate student at the University of Texas

(Constance, Why The ITC Matters for Offshore Wind, NA Wind Power, Volume 10, Number 6, http://www.nawindpower.com/issues/NAW1307/FEAT_03_Why_The_ITC_Matters_For_Offshore_Wind.html)

Over the last few years, there has been much discussion about the role of tax credits in the wind industry and whether there should be offshore-specific incentives. With federal tax reform on Congress agenda, it is relevant to examine the implications of these policies.

The sunsetting of tax incentives is an ongoing concern for the wind industry as a whole, but it is particularly problematic for the nascent offshore wind sector. Offshore wind projects take multiple years to plan and permit. For example, it took nine years for the Cape Wind project to receive a favorable record of decision, which will ultimately allow the developer to begin construction of the 468 MW offshore wind project in Nantucket Sound.

As regulations become clearer, permitting requirements more streamlined and infrastructure plans more concrete, the time to plan and develop offshore wind projects will decrease. However, the development process will still be longer for offshore wind projects than for onshore wind projects. One reason for the long timeline is that existing state permits allow up to seven years from initial leasing to the start of electricity generation, due to the assessments, logistics and planning required for offshore projects.

The extension of the production tax credit (PTC) and the investment tax credit (ITC) which allows projects to qualify for the PTC or ITC if they begin construction by Jan. 1, 2014 is a step in the right direction, as is the passage of the Incentivizing Offshore Wind Power Act, which was reintroduced in February by Sens. Tom Carper, D-Del., and Susan Collins, R-Maine.

The legislation would provide a 30% ITC for the first 3 GW of U.S. offshore wind projects. Once awarded a tax credit, companies would have five years to install the offshore wind facility. Companies would not be able to receive other tax credits in addition to the offshore wind ITC.

Financial modeling

In order to determine how tax credits would affect the offshore wind industry, financial models projected the capital and total costs for three hypothetical wind projects. Next, a cashflow was used to calculate the net present value (NPV) of the projects under different conditions. Then, a series of mathematical experiments was used with the cashflow to determine equations for the NPV from the hypothetical project scenarios.

The basic projects modeled include specific assumptions about configurations and components that were based on publicly available real-world data. Two hypothetical offshore wind farms were modeled for this analysis. Project 1 was a 500 MW project consisting of 5 MW turbines, and Project 2 was a 300 MW project containing 3 MW turbines. Each project featured monopile foundations. The hypothetical project sites were located six nautical miles offshore in 22.5 meters of water, and the projects expected lifetimes were 20 years. (Many of the projects currently planned in U.S. waters use other types of foundations. However, at the time of the models development, only monopile cost information was available.)

Although many factors influence project costs and returns, this analysis found that some factors far outweigh others. The equations that were generated to calculate the NPV for the sampled data contained five variables: capacity factor, average mean wind speed, electricity price, capital cost (CAPEX), and operations and maintenance expenses (OPEX).

Each variable was considered independent of the other four. Other factors, such as the size of the project, were considered fixed once these decisions were made. This was done in order to focus on the variables that create uncertainty in other words, the factors that influence the financial outcome of the project but for which project decision-makers have little or no control. In markets where offshore wind projects can obtain a contract that sets a purchase price for the electricity, it is possible to remove the price uncertainty.

A third hypothetical project, Project 3, was structured in the same way as Project 1 but with a fixed electricity price of $0.155/kWh. This price was selected because it is halfway between the mean and high price values used in the rest of this analysis.

Estimating tax-credit implications

Three tax scenarios were modeled using the aforementioned process to generate sets of equations for the NPV for each project. The equations all had the same form but different coefficients for each variable.

The first scenario assumed that no wind-specific tax credits existed. Second, a PTC worth $0.022/kWh was assumed and taken for the first 10 years of electricity generation. The last scenario assumed an ITC of 30%, available to be claimed in the year that new equipment was placed in service. Specifically, this scenario allowed the developer to take this credit in the first year that the wind farm went into service and assumed that no other new equipment would be installed during the life of the project. The second and third scenarios were modeled after existing tax credits available to the wind industry.

Once the equations were generated, 1,000 combinations of the five significant variables were created using a random number generator for each project. Then the NPV for each set of variables was calculated, generating a set of 1,000 possible outcomes for each tax scenario. The chart below shows the range and means for each of the five input variables, where OPEX and CAPEX are shown in millions of dollars.

The results

Of the 1,000 sample data combinations for Project 1, 26.9% generated a positive NPV without any tax credit. This percentage increased to 43.8% with a PTC and to 57.3% with an ITC. Electing the ITC allowed 30.4% more of the potential project outcomes to have a positive result, which is more than double the positive results that would occur with no credit claimed.

When the price was fixed at $0.155/kWh for Project 3, 44.1% of samples generated a positive NPV without a tax credit, 62.9% had a positive NPV with a PTC, and 79.2% had a positive NPV with an ITC. In the price-fixed scenario, claiming an ITC allowed 35.1% more positive outcomes than not claiming a tax credit at all.

For Project 2, 31.7% of outcomes were positive without a tax credit, 41.3% were positive with the PTC, and 54.2% were positive with the ITC. Choosing the ITC resulted in 22.5% more positive outcomes than having no credit. Table 2 shows a summary of the results from the entire analysis.

Nearly every outcome generated a higher NPV by opting for the ITC rather than the 10-year PTC. In fact, only seven of the 3,000 total samples 1,000 per project resulted in a higher NPV by taking the PTC, and the maximum higher NPV from the PTC was only $12.16 million higher. In contrast, choosing the ITC resulted in higher NPVs of up to $468.54 million above the return using the PTC. Choosing an ITC instead of a PTC resulted in an NPV that was an average of 14.2% higher.

These results clearly show that an ITC allows for the highest percentage of positive outcomes from a given offshore wind project. However, this process does not consider whether these hypothetical projects would be considered for planning and construction. Real-world projects would have a higher percentage of positive NPV results because of site selection and project-specific planning decisions that would eliminate poorer choices.

Although these were hypothetical scenarios and not real-world projects, it is clear that tax incentives for offshore wind help the embryonic U.S. offshore wind industry by allowing a higher percentage of the potential outcomes of a project to be positive.

Having a positive mean NPV for a project does not necessarily make it financially appealing. However, the shift toward higher returns and a greater percentage of positive outcomes allowed by tax incentives reduces the financial risk and allows more projects to move into a range where investors and financiers would be interested.

If PTCs and ITCs are authorized only for periods of time that are shorter than the time required to plan offshore wind projects, then the tax credits cannot be considered when assessing the financial viability of the projects. In order for tax credits to be useful to the offshore wind industry, they need to be extended through 2020 or beyond.

Both the ITC and PTC aid the financial viability of offshore wind projects by reducing the chance of negative returns, but the ITC provides a greater increase in positive NPV. In 99.7% of the results, the ITC allowed a higher project value. Simply put, the ITC is of greater value to the offshore wind industry

Long-term extension is key

Shott, No date, Sr. Legislative Representative for Climate & Energy

(Corey, Incentivizing Offshore Wind, National Wildlife Federation, http://www.nwf.org/~/media/PDFs/Global-Warming/Offshore%20Wind/Incentivizing-Offshore-Wind-Fact-Sheet.pdf)

One of the primary obstacles facing American offshore wind development is the inadequate and inconsistent federal investment in key financial incentive programs for renewable energy. The unique challenge of offshore wind energy long investment time, infancy of the industry, and higher initial project costs require longer term certainty of financial incentives. The 112th Congress extended the offshore wind Investment Tax Credit (ITC) for projects that begin construction before January 1, 2014, but action is needed to ensure longer term certainty of this critical tax incentive in order to leverage the significant private investments that will be made to launch this new job-creating clean energy industry in America.

Recognizing this challenge, Senators Carper (D-DE) and Collis (R-ME), and Congressman Pascrell (D-NJ) and LoBiondo (R-NJ), have introduced the incentivizing Offshore Wind Power Act (S. 401 & H.R. 924) to provide a investment tax credit to the first movers in the offshore industry. Extending the investment deadline will attract the financial support vital for harnessing Americas abundant and untapped offshore wind capacity.

Modeled after a production tax credit for the nuclear power industry in the 2005 Energy Policy Act, the legislation:

Provides a 30% tax credit on investment in offshore wind for the first 3,000