Former Massachusetts Governor Deval Patrick’s (D) export-terminal dreams have become a nightmare for the state’s taxpayers, as the South Coast Marine Terminal being constructed as a staging area for a large offshore wind development has come on hard times since the Cape Wind project has been all but officially scrapped.
It was originally estimated the terminal project would cost taxpayers $113 million. Currently, the project, still under construction, has already run $10 million dollars over budget and is months behind schedule. The terminals construction costs were to be offset by revenues from the wind project, but now state officials are scrambling to find someone to lease the terminal. Present options are estimated to generate a lower return on investment than the profits projected to be generated by Cape Wind.
New Story, Old Lesson
This episode is just the latest cautionary tale in the saga of east-coast energy, as states up and down the Atlantic Coast continue to offer large sums of taxpayer money to fund wind and solar farms while shuttering coal-fired power plants, and opposing the expansion of natural gas pipelines to transport clean, reliable natural gas to the Northeast.
State government actions have resulted in ratepayers in the Northeast paying disproportionately high rates for natural gas despite being located directly next to the Marcellus Shale formation, the second largest natural gas producing region in the country.
Unless something unexpected occurs, with the collapse of the Cape Wind project, it seems Massachusetts taxpayers will be saddled with an expensive, idled shipping terminal, constructed to serve as a hub for the building and maintenance of an off-shore wind farm, that never got off the ground.
Merrill Matthews, resident scholar with the Institute for Policy Innovation, noted that federal taxpayers also lost money when the government bet on Cape Wind. Matthews said, "The Obama administration had allocated $930 million taxpayer dollars—a $780 million production tax credit and $150 million loan guarantee—to underwrite the first U.S. offshore wind farm. But the deal fell apart when Bay Staters realized that even with that taxpayer largesse they would still have had to pay up to 50 percent more for electricity. The project's cost gave a whole new meaning to the term "green energy."
Isaac Orr (iorr@heartland.org) is a research fellow for energy and environmental policy at The Heartland Institute.