Federal Budget Sequestration To Suck Wind From Clean Energy’s Sails

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Well, it’s the end of another fateful week, and month, in Washington D.C., and the US Congress is once again demonstrating just how dysfunctional national politics has become. Among the widespread and profound disruption to the US economy that’s anticipated, the looming federal budget sequestration process may bring rapid growth in renewable energy and clean technology to an abrupt halt.

“We have made impressive gains, approving dozens of utility-scale solar, wind and geothermal projects in the West and transitioning from planning to commercial leasing for offshore wind,” Outgoing Department of Interior Secretary Ken Salazar told some 300 industry leaders in a keynote address at the Offshore Wind Power USA Conference in Boston February 26. “The potentially devastating impact of budget reductions under sequestration could slow our economy and hurt energy sector workers and businesses.”

Renewable Energy Development in Light of Automatic, Across-the-the Board Cuts

Requiring automatic, across-the-board federal budget cuts of 10%, the sequester was enacted during the bitter debt ceiling negotiations that resulted in passage of the Budget Control Act of 2011.

With Congressional representatives unable to reach any sort of a compromise, the federal budget sequestration process is about to go into full swing, a process that will require reductions in all federal government services and programs, as well as furloughs or layoffs of an estimated 108,000 federal agency employees, according to a Center for Strategic Budgetary Assessments report.

That doesn’t include expected layoffs among private sector government contractors, though these may come about after a lag of months or years, according to analysts. Some 14% of the federal government’s budget — more than $500 billion a year — is allocated among private-sector contractors which employ an estimated 7.5 million people to carry them out, according to a CNBC News report.

With his nominee and potential successor, REI CEO Sally Jewell, waiting on Senate confirmation hearings, Interior Secretary Salazar recounted the notable progress made during his tenure regarding renewable energy development.

Elevating renewable energy development to a departmental priority, the Interior Department “worked with industry, state, tribal, and local partners to approve 34 projects on public lands in western states and to build an offshore regulatory framework in the Atlantic,” Secretary Salazar stated.

“The 18 utility-scale solar facilities, 7 commercial wind farms and 9 geothermal plants Interior green-lighted onshore would provide 10,400 megawatts when built, enough to power 3.4 million homes. The developers estimate that these projects would support 13,000 construction and operations jobs.

“Automatic budget cuts implemented per the sequester threatens the ability of the Department to plan for and issue permits for new development projects, conduct environmental reviews, and lease new federal lands for future development,” according to the Interior Secretary.

This extends to issuing permits for more than 500 offshore oil and gas exploration and development projects in the Gulf of Mexico. Whether or not the sequestration process will delay the first-ever auctions for offshore wind energy development remains to be seen.

Following through on the Obama Administration’s “Smart from the Start” development strategy, Interior and other federal agencies have worked with state counterparts, academia, and industry to identify six Wind Energy Areas (WEAs) off the Atlantic coast that hold the greatest wind energy potential and fewest conflicts with competing uses and marine conservation.

Interior has already issued two non-competitive commercial wind leases – one off Massachusetts’ and one off the Delaware coast. It’s also moving forward with plans to conduct the first-ever competitive lease sales for Wind Energy Areas off Virginia and Rhode Island/Massachusetts, an offshore area that spans nearly 278,000 acres. Secretary Salazar also signed a lease and approved a Construction and Operations Plan for the 130-acre Cape Wind project, “the first commercial wind development slated for federal offshore waters.”

Development of offshore wind farms in the WEAs “could support more than 4,000 megawatts (MW)” of clean, renewable power generation capacity — enough to supply 1.4 million homes — close to heavily populated areas up and down the East Coast, according to the Department.

In addition, the Bureau of Ocean Energy Management (BOEM) is evaluating a proposal to build the Atlantic Wind Connection, offshore, mid-Atlantic region transmission infrastructure that could carry as much as 7,000 MW of electricity from offshore wind farms off New Jersey, Delaware, Maryland, and Virginia across an area that stretches from southern Virginia to northern New Jersey.

The Department of Interior and Obama Administration, along with industry and public supporters, have had to fight long and hard to achieve these milestones in US energy policy. The looming sequestration process will throw another substantial obstacle in their way.

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