Some pretty huge news today on the sustainable energy front. Ken Salazar, Secretary of the Interior, announced today that the long-stalled Cape Wind project has been given the green light. Cape Wind project is a 130 turbine wind farm that is projected to produce more than 50% of Cape Cod's energy needs when fully operational. The project had been stalled for more than 9 years because of objections of prominent Massachusetts politicians who resided on Cape Cod and did not want their ocean view obstructed. This will be the first ever offshore wind farm in the United States. Though small by global proportions, it signals a new era of renewable energy development.
This development is particularly relevant now because it comes during the same week that bipartisan negotiations on climate change legislation stalled. Ironically, these two events play into the narrative that an activist government cannot succeed in solving major American problems. Many would say that this shows the power of American business in moving the country forward. Personal entrepreneurship clearly trumped government intervention in this case, yes, but lets take a step back.
This huge leap forward took 9 years to be approved, let alone built. This is the kind of slow action that occurs without serious lobbying by the relevant corporations. At present, wind energy does not have anywhere near the kind of capital to invest in lobbying that the oil, coal and gas industries do. This is probably why the 2005 energy bill provided $5 billion in direct subsidies to oil producers to bring down costs. When renewable energy was finally given $8.5 billion in development loans as a part of the recovery act, it was hailed as a huge achievement. This is small when the CATO Institute estimates total U.S. oil subsidies are somewhere between $78-$158 billion. This is where people are not paying attention. Giving billions of dollars to oil companies is government intervention. It slates the table against renewable energy companies, preventing entrepreneurship.
What the country really needs is to shift these subsidies away from the oil and gas industry and put them into clean energy. If this is too controversial, eliminate these subsidies altogether. The free market system requires fair competition to work properly. Giving oil subsidies does not produce this fair competition. For those of us who want to see a renewable energy boom in America, this is still fantastic news.