No Disads Offshore Wind Exists Now Plan Is Key to Expansion

Inherency

No disads – offshore wind exists now – plan is key to expansion

Navigant Consulting, Inc. ’13(Bruce Hamilton, Principal Investigator, Lindsay Battenberg, Mark Bielecki, Charlie Bloch, Terese Decker, Lisa Frantzis, Jay Paidipati, Andy Wickless, Feng Zhao, October 17, 2013, Offshore Wind Market and Economic Analysis,

Since the last edition of this report, several potential U.S. offshore wind projects have achieved notable advancements in their development processes. In addition to two BOEM commercial lease auctions for federal Wind Energy Areas (WEAs), other, later-stage, commercial-scale projects have made incremental progress toward starting construction. On the demonstration project front, the DOE awarded seven Advanced Technology Demonstration (ATD) project grants in December 2012 that will help address ongoing challenges and cost barriers to offshore wind energy. In addition, in June 2013, the University of Maine (in partnership with the DOE) installed the United States’ first offshore wind turbine, a 1/8-scale pilot turbine on a floating foundation. This section provides an overview of these and other updates to U.S. offshore wind project developments.

Offshore wind is blocked in the status quo because of an incoherent regulatory framework- without federal action local opposition ensures no wind development

Erica Schroeder in 2010, J.D., University of California, Berkeley, School of Law, 2010, Yale School of Forestry & Environmental Studies, 2004; B.A., Yale University, 2003 California Law Review Vol 98 Issue 5, Turning Offshore Wind On,

The drastic growth in electricity produced by wind in the United States indicates that wind power is poised to become a significant component of the United States' energy portfolio.' Installed wind capacity has grown from about 1,000 megawatts (MW) in 1985 to nearly 35,000 MW by the end of 2009, enough to power roughly 9.7 million homes. As of September 2008, the United States led the world in energy produced by wind turbines.3 According to the U.S. Department of Energy (DOE), currently installed wind power capacity in the United States will avoid an estimated sixty-two million tons of carbon dioxide annually, or the equivalent to taking 10.5 million cars off the road.4 The federal government appears to recognize the opportunities and benefits that wind power offers. In February 2009, Congress positioned wind power generation to continue its rapid growth5 by renewing production tax credits for wind power projects through 2012. Congress also gave the wind industry options for investment tax credits or U.S. Treasury Department grants for certain wind power projects placed in service by 2012.7 In addition, in July 2009, DOE announced up to $30 billion in loan guarantees for renewable energy projects, including wind power. President Obama continues to promote renewable energy, including wind energy, as well. For example, in his 2010 State of the Union, the President spoke repeatedly about the need for renewable energy investment.9 DOE predicts that by 2030 the United States could get as much as 20 percent of its electricity from wind, if the nation is able to overcome certain challenges to wind power progress today.'0 In spite of the impressive growth in the U.S. wind industry, the United States has not kept pace with other countries in developing offshore wind facilities. Though offshore wind has been used in other countries for nearly twenty years,'1 none of the United States' current wind capacity comes from offshore wind.12 An estimated 900,000 MW of potential wind energy capacity exists off the coasts of the United States -an estimated 98,000 MW of it in shallow waters.14 This shallow-water capacity could power between 22 and 29 million homes, or between 20 and 26 percent of all U.S. homes. The nation has failed to take advantage of this promising resource. This failure can be ascribed in part to the unevenly balanced distribution of the costs and benefits of offshore wind technology, as well as to the incoherent regulatory framework in the United States for managing coastal resources.17 While the most compelling benefits of offshore wind are frequently regional, national, or even global, the costs are almost exclusively local. The U.S. regulatory framework is not set up to handle this cost-benefit gap. As a result, local opposition has stalled offshore wind power development, and inadequate attention has been paid to its wide-ranging benefits. The Cape Wind project in Massachusetts is a stark example of how local forces have hindered offshore wind power development. The project is expected to have a maximum production of 450 MW and an average daily production of 170 MW, or 75 percent of the 230-MW average demand of Cape Cod and neighboring islands.'8 In addition to this electricity boon to energy-constrained Massachusetts,19 Cape Wind will reduce regional air pollution and global carbon dioxide emissions.20 Nonetheless, local opponents to Cape Wind protest its effect on the surrounding environment, including its aesthetic impacts.21 Without an effective way to champion the regional, national, and global benefits of offshore wind, policymakers have been unable to keep local interests from controlling the process through protest and litigation. After about ten years of waiting and fighting, Cape Wind developers have still not begun construction. Although the failure of offshore wind power in the United States is discouraging, the Coastal Zone Management Act (CZMA) offers a potential solution. With specific revisions, the CZMA could serve as the impetus that offshore wind power needs for success in the United States.

***Economic Competitiveness Advantage

Jobs Down

Despite recent gains in the job market, more are needed to secure the recovery

CNN, 6/6

It took two years to wipe out 8.7 million American jobs but more than four years to gain them all back. That's according to the Department of Labor's latest jobs report, which shows the U.S. economy added 217,000 jobs in May. With that job growth, there are now more jobs in the country than ever before. The last time we were near this point was January 2008, just before massive layoffs swept throughout the country, leading the unemployment rate to spike to 10%. The unemployment rate is unchanged at 6.3% for May, and much has improved since the worst of the crisis. Yet, this isn't the moment to break out the champagne. Given population growth over the last four years, the economy still needs more jobs to truly return to a healthy place. How many more? A whopping 7 million, calculates Heidi Shierholz, an economist with the Economic Policy Institute. President Obama's administration was quick to point out that the recovery is still incomplete by their standards. "We're moving in the right direction, but we have a lot more work to do," said Secretary of Labor Tom Perez. "There are way too many people who are still on the sidelines." As of May, about 3.4 million Americans had been unemployed for six months or more, and 7.3 million were stuck in part-time jobs although they wanted to work full-time. Both these numbers are still elevated compared to historic norms, and are of concern to Federal Reserve officials, who will meet in two weeks to re-evaluate their stimulus policies. Overall, this has been the longest jobs recovery since the Department of Labor started tracking jobs data in 1939. Economists surveyed by CNNMoney predict it will take two to three more years to return to "full employment," which they define as an unemployment rate around 5.5%.

Econ down- jobs key

US economic recovery will be halted without significant job growth

Fitch Ratings 2014

(“Fitch: U.S. Jobs Surveys Tell Same Story, Despite Differences” By: Fitch Ratings, Business Wire (English), 01/14/2014, ebsco)

Last week's U.S. employment surveys for December support Fitch's view that the healing of the labor market is not proceeding quickly enough to drive a significant pick-up in U.S. economic growth. Despite a decline in the headline unemployment rate to 6.7% in December, labor productivity and participation rates have stayed weak since the recession. We remain concerned that high levels of unemployment and under-employment will continue to dampen consumer spending and delay the start of a more robust economic recovery.Differences between the monthly employment reports released by ADP and the Bureau of Labor Statistics (BLS), evident in the December payrolls data, will likely be smoothed over the next quarter as monthly numbers are adjusted. While significantly different, we believe both surveys have shown ongoing, accelerating improvements in job creation over recent months. Unfortunately, thereports still indicate that U.S. employment levels are not rising fast enough to offset job losses suffered during the last recession.The U.S. economy needs to generate between 185,000 and 200,000 jobs monthly to significantly reduce unemployment. The higher December payrolls number from ADP reflects stronger jobs growth at the end of 2013, but appears to be a catch up relative to the BLS numbers over the last 24 months. BLS reports reflect an average increase of 187,000 jobs per month over that period, while ADP averaged 170,000. Typically, the net difference between the reports is below 0.06% of total jobs each month. For December, ADP reported net growth of 238,000 jobs while BLS reported only 74,000. Last February 2013, by contrast, BLS reported a significantly higher monthly jobs number than ADP. Of greater concern is that the December increase is not statistically significant. So if the BLS number is not revised, it is likely that there was little or no discernible employment growth in the fourth quarter. This repeats recent seasonality patterns in the U.S. economy where the greatest growth is experienced in the first part of the year and tails off each year. BLS jobs growth was highest in the first and second quarters of 2013, adding an estimated 637,000 and 569,000 jobs, respectively. ADP's highest quarter is the fourth quarter at 638,000 and the second highest is the first at 529,000. To further cloud the data, GDP growth for the third quarter has been attributed to a large inventory increase, casting doubt on the fundamental strength of the economy in the second half of last year. Fitch projects a modest increase in U.S. GDP growth in 2014 and 2015. The outlook for U.S. corporate credit is stable. However, little positive momentum is expected in the near term.

Manufacturing is down now

Manufacturing declining, we are losing economic competitiveness

Smil ’11 (Vaclav Smil, economist for Breakthrough institute, The Manufacturing of Decline, The Breakthrough Institute, , accessed: 6/30/14 GA)

But these numbers can be deceptive. America's manufacturing sector has retreated faster and further in relative terms than that of any other large, affluent nation. US manufacturing as a percentage of GDP declined from 27 percent in 1950 to 23 percent in 1970 to 14 percent in 2000 to 11 percent in 2009. While manufacturing as a share of GDP has also declined in Germany and Japan, both countries have retained relatively larger manufacturing sectors at 17 and 21 percent, respectively. The contribution of manufacturing to per capita GDP is also higher in Germany ($6,900) and Japan ($8,300) than in the United States. The most shocking, but underemphasized, fact about global manufacturing is that Germany's share of global merchandise exports is actually higher than America's (9 percent vs. 8.5 percent in 2009), despite having an economy just one-quarter of the size. As a consequence, the United States is lagging as a global economic competitor. In 2009, Germany and Japan had large manufacturing trade surpluses ($290 and $220 billion, respectively) while the United States had a massive manufacturing trade deficit ($322 billion).5 The other key measure -- little known in popular discussions of manufacturing -- is export intensity, the ratio of a nation's exports to its total manufacturing sales. The global average export intensity is twice as high as that of the United States, which ranked 13th out of the 15 largest manufacturing countries in 2009, higher only than Russia and Brazil.6 Meanwhile, the leading EU countries had export intensities 2.5 times to 4 times higher than America's. Comparisons of the value of manufactured exports on a per capita basis are even more dramatic: they are higher in Spain ($3,700), Japan ($4,000), Canada ($4,600), and Germany ($11,200) than in the United States ($2,400). The US manufacturing sector is also badly trailing China's, though in order to fully appreciate this, one must calculate the real value of China's artificially undervalued currency (the yuan renminbi, or RMB). The 2009 data from the United Nations lists US manufacturing output at $1.79 trillion versus RMB 14 trillion or $2.1 trillion for China when converted at the official exchange rate for 2009 (about RMB 6.8/US dollar).7 But according to the purchasing power parity (PPP) conversion preferred by the International Monetary Fund, one RMB should be worth 29 cents, or RMB 3.4/US dollar. Even if the real RMB value were only 50 percent higher than the official rate, the total added by China's manufacturing in 2009 would be in excess of $3 trillion, or about 67 percent above the US total. America has historically been an effective mass-maker of low- to medium- quality products for its huge domestic market, but an inferior exporter. As long as America imported few manufactured goods, energy, and food, this weakness did not matter. Today, however, America has enormous manufactured imports, a huge energy import bill, and a lower surplus on its food trade. For the last 35 years, the US has had a positive and rising balance in service trade and, until 2006, a generally worsening balance in trading of goods (including food, fuels, and raw materials). Recent exports of manufactured products increased (in nominal terms) by nearly half between 2000 and 2008 before dropping by 25 percent in 2009 as a result of the economic downturn and then almost recovering in 2010. But the imports of manufactures also kept on rising -- by about 46 percent between 2000 and 2008.8 The United States has imported more than it has exported for so long that few remember the switch from net exporter to net importer. From 1896 to the early 1970s, the United States had a trade surplus. In 1976, America's trade deficit was just $6 billion, but by 1990, the trade deficit was more than 13 times larger at $80 billion (all in nominal terms). By 2006 it was almost 10 times bigger still: $759 billion. While the economic downturn reduced the annual total to $375 billion in 2009, it rose again in 2010 to nearly $500 billion. Indeed, America's trade deficit is larger than the individual GDPs of all but 19 countries in the world. The United States is failing even where it was once dominant. In 1950, American companies made about 95 percent of cars sold in the United States; 60 years later, the country that invented mass automobile production bought most of its light vehicles from foreigners. The crossover occurred in the summer of 2007 when the Detroit Three began to sell less than half of all passenger cars and light trucks bought in the United States. Three years later, the Detroit share had declined further. In 2010, roughly 45 percent of all light vehicles sold were from American makers while 55 percent came from foreign makers (with Japanese companies accounting for nearly 85 percent of the latter share).9 While Ford did eventually manage to improve its performance, General Motors, previously the world's largest auto manufacturer, lost its primacy and had to be salvaged by public funds. But the US automobile sector isn't the only one losing ground. While the conventional wisdom is that the United States has a strong comparative advantage in advanced technology, the reality is that in this sector, the US trade deficit grew nearly 50 percent from 2009 to 2010, when it was $81 billion, and by nearly 65 percent in the first three months of 2011 (compared to the first three months of 2010). The consequences, in terms of jobs, are plain to see. Today, unemployment in the United States is at almost 9 percent compared to around 7 percent in Germany and 5 percent in Japan. The loss of manufacturing jobs explains a hefty part of the difference. By the end of 2010 only 8.2 percent of American workers were employed in manufacturing, while about 19 percent of German workers and 18 percent of Japanese workers are employed in manufacturing.

US Falling Behind- Fed Renewables key

Global clean tech investment high now, but US is in danger of losing its clean tech leadership – PTC key to signal US interest in renewable energy.

Greene 6/14/12, Nathaniel (Director of renewable energy policy at The Energy Collective, Masters in Energy Policy from Berkeley). “Congress’ 2 trillion dollar clean energy challenge.” The energy collective.

But as excited as I am about the incredible advances renewable energy has made, I am equally concerned that the US will miss out on the paradigm shift in the world energy market. That concern was highlighted recently by the release of three important reports, one from Third Way, one from the Pew Charitable Trusts, and one published jointly by the Breakthrough Institute, the Brookings Institute and the World Resources Institute. All three highlight that we’ve made incredible progress in the last several years towards a clean, renewable energy future. But all three also point to the same conclusion: We can let slip this incredible economic opportunity if we allow key federal incentives for clean, renewable energy to expire. The Third Way report likened our current moment to one faced by photography giant Kodak which failed capitalize on its early—in fact, industry-leading—digital photography technology. Congress, too, seems to be having a Kodak moment, failing to grasp the energy paradigm shift now underway. Perhaps that’s why, they’ve let several key renewable energy incentives lapse, including the Section 1603 cash grant program for solar, credited with producing 75,000 jobs. Others, like the Production Tax Credit for wind, and several advanced energy manufacturing incentives will expire soon, reduce employment in wind by 37,000 jobs. All told, per the Institute report, federal investment in clean, renewable energy will fall to just a quarter of its 2009 total by the end of 2014. If we fail to continue investing in renewable energy, we’ll lose our recent global leadership in clean energy investment to countries such as China, Germany and South Korea. They’re still pouring hundreds of billions of dollars into this exciting field, just as it’s starting to transform the way the world gets power. World renewable markets are growing exponentially of late. Less than ten years ago, solar power was a cottage industry. Now, it’s what a recent report by McKinsey & Company calls “a $100 billion business with global reach.” Federally funded advances in both in technology and in the way that technology is deployed have helped drive this growth. Already, the price of wind power has dropped 90 percent in the last 30 years, thanks to innovations developed at the National Renewable Energy Laboratory and promoted through the soon-to-expire Production Tax Credit. Similarly, the price of solar electricity has plunged over the last eight years, as government incentives and standards have driven both demand and incredible economies of scale. In 2004, one manufacturer of US-made solar panels sold them for $2.94 a watt. Today, their price is 73 cents a watt—75 percent lower. That’s why it’s troubling, and a bit perplexing, too, to see Congress oppose the extension of programs that have driven so many advances and produced so many jobs in this burgeoning field. Clean, renewable energy creates jobs, cleans the air our kids breathe, and reduces our dependence on dirty coal and foreign oil. Let’s not miss out on the economic chance of a lifetime by pulling the rug out from under these programs. They spur clean, renewable energy’s success, both in the US and in the $2 trillion world market.