Braking Wind

Wednesday, August 26, 2009

By Henry Sweets

Jackson Hole, Wyo.-The future of wind development in Wyoming depends on the politics surrounding a small pheasant-like bird, and taxes.

This was the buzz at a wind conference held in the halls of a university largely built with oil, coal and gas money two weeks ago.

At the conference, the governor delivered a speech with a two-pronged message to wind developers: We’ll be your friends, but watch out for that bird, and give us money.

His message to Wyoming: We’re going to let this happen slow and smart, so we don’t screw up our state’s future.

Green energy revolution
A year ago, a gold rush was on to develop wind in Wyoming. Developers were stumbling over themselves to set up wind gauges on private, state and federal land and get their foot in the door for lucrative wind deals. The rush was particularly acute near Rawlins, in Carbon County, the south central region of the state.

Power companies wanted to carry electricity from Wyoming all the way to California. The lack of power lines was the only thing stopping them, so while they waited for them to be built, developers courted ranchers, and a feel-good story about “green” energy emerged: struggling landowners would get enough income from wind turbines to keep their ranches, run cows in the shadow of the white towers, and send their kids to college with the promise that the ranch would be there upon return. Wyoming was on the cusp of the green energy revolution.
But in July, that all changed.

The governor announced that some of the best areas for wind energy development were off limits because of the sage grouse. The bird is on the brink of a listing with the Endangered Species Act, a listing that would threaten oil, gas, coal and ranching industries in Wyoming as well as wind.

Projects hit the skids, ranchers lost their hope of saving the farm, and the industry started wondering about the future of Wyoming wind. So the governor called the meeting, to air a few concerns and get the 600 or so attendees talking. Some serious roadblocks, and political maneuvering, emerged.

Wind industry executives, public officials, landowners and many others talked about all sorts of issues, but at the top of most attendees’ minds was ‘What’s going to happen with the sage grouse?’

Energy developers look for wind that blows fast, blows consistently and is easy to access. Industry experts say that the wind that best meets these requirments in America blows in central Wyoming, in and around Carbon County, where the sage grouse likes to nest.

The “core areas” of sage grouse habitat were indentified on a map drawn by the sage grouse implementation team, which was composed of conservationists, government officers, agricultural interests and members of the oil and gas industry. The map protects 80 percent of the birds in Wyoming, but some conservationists and wind developers complain that the 20 percent that are excluded are in places like the Powder River Basin, where coal and gas are king. They say that, like the rest of the country, Wyoming can’t kick its carbon addiction.

Show Wyo. the money
When the Governor spoke at 8 a.m., he delivered a clear message.

“The fact that Al Gore likes wind energy is great, but at the end of the day, we cannot end up with one industry compromising the economy of this state,” he said.
The governor requested that the wind industry do what it can to keep the sage grouse off the endangered species list, a request, he said, that the state has also made to the coal, oil and gas industries.

He went on to say that the state would play ball with the wind companies, but not let them exploit Wyoming’s resources without giving back.

“It isn’t the case that we’re going to be some colony that’s going to be really happy to have a bunch of towers sticking up in the air and little else,” he said. “We expect the developer who comes to Wyoming and put up wind turbines to do a little more.”
He stuck to his guns throughout the conference.

“I have (wind) project sponsors who’ll come in and say, ‘You know governor, you’re not nice enough to us, so we’re going to leave,” he said. “You know I heard all that in the ‘70s, and it didn’t impress me then, and it doesn’t impress me now.”
He compared the rush for Wyoming wind to the mineral boom that happened after the Arab oil embargo in the late ‘70s, and said the decisions made now with regard to wind energy would affect generations to come.

Roadblocks to wind
Shortly after the governor’s presentation, a Wyoming native named Mark Stacy, project manager for Iberdrola Renewables, stood up to explain how wind projects get off the ground.

But before they get started, he said, developers look at the “Roadblocks to Success.”

He said, frankly, that political unknowns drive developers away.
“The things that make us nervous, and would make any company nervous, is when the game plan changes midstream, so that we can’t predict what’s required of us,” Stacy said. “It could cause cost overruns, and significant delays.”

Nate Sandvig was developing a project in Carbon County for Horizon Wind, the third largest wind developer in America, that would have erected 198 turbines. When the governor announced in July that there would be no development of wind resources in the sage grouse “core areas,” the project would have gone through as a research project, because no data exists about how grouse inteact with turbines. But then the Fish and Wildlife service said in a letter that even research projects weren’t in keeping with the spirit of sage grouse core area protection, so in August the Simpson Ridge Project was put on hold.

“It was a pretty mature project ... and then there was a complete 180 with no development in the core areas,” Sandvig said in an interview with JHWeekly.
The sage grouse implementation team that drew the map included no representatives from the wind industry.

“I think they’ve been pretty clear that these maps were made with access to oil and gas in mind, and wind energy is not part of that discussion,” Sandvig said about the team. “I think the view was that we weren’t a mature enough industry in the state to be a part of that discussion.”

But Sandvig has joined the implementation team, very recently, in hopes that some resolution can be reached. He said it remains unclear whether Wyoming is going to be a leader in wind energy, but he has a vested interest in making sure it is.
For now, the turbines will go elsewhere.

“That was a capital investment to the state of potentially over $400 million, which provides renewable energy, jobs, property taxes and certainly landowner wealth,” Sandvig said.

“Wind project sites are competing for turbines, so given that we had to delay and the future is uncertain we’ve reallocated those turbines elsewhere,” he said.
Sandvig added that until lines are redrawn, or “core area” policy is changed, the project in Carbon County, on Simpson Ridge, will not be developed.
“It’s a false choice to pit wind against oil and gas, we think they can coexist,” Sandvig said. “There’s plenty of space.”

What we know about the bird
The Simpson Ridge project would have been the first opportunity to get research about how sage grouse react to wind turbines.

Right now, the science is based on assumptions. Sage grouse are known to avoid tall objects where predators (raptors) can perch, and even though raptors can’t perch on turbines, the bird would avoid them anyway. The assumptions are drawn from research based on oil and gas developments near sage grouse leks, Sandvig said. Some assume that, although oil and gas development sometimes bring more traffic, more noise, more pollution and a greater footprint, it is easier on the sage grouse, but Sandvig disagrees.

“I don’t think it’s fair to compare oil and gas science and draw conclusions that show that wind would have a greater impact without even knowing it scientifically,” Sandvig said. “If we want to realize our ambitious goals of developing renewable energy as demanded by political administrations ... we need to understand how wind farms affect sage grouse.”

Taxes
Oil, gas and coal all pay hundreds of millions to state governments from their taxable commodities, and they also provide thousands of jobs in the state. Wind provides only property tax revenue, and fewer jobs.
To be as valuable to the state as those industries, wind will have to pay more taxes, something that’s already happening with the sunset on a property tax exclusion for the wind companies.

“If you look, just in close proximity to this campus and this building, you can see the fruits of the natural gas industry and the coal industry, and we look forward to the same sorts of things from our friends in the wind industry,” Ryan Lance, Freudenthal’s energy advisor said during an introductory presentation. “We can go along with the rest of the country in terms of appreciating the green energy portfolio in terms of helpin’ folks along, but we want to know what the bottom line looks like and we want to get our cut.

“The governor is very fond of saying ‘We are very anxious for you all to develop your resources, so we can tax the hell out of them.’”

But that’s something that Stacy personally identified as a “roadblock.”
“It’s our responsibility to have projects that have the most value to our shareholders and if tax regimes are out of whack in different states, there’s going to be a disincentive for us to build there,” he said.

Sandvig said that Wyoming already has property taxes four times higher than other states he does business in.
The taxation debate continued.

A rancher, Larry Cussell, gave a presentation called “The Snake Pit,” in which he painted landowners, developers and state officials as greedy snakes that are fighting, but in collusion with one another. His warning was that everyone needs to be less greedy in order for the wind industry to take root in Wyoming.

Listing
Wyoming is no stranger to the threat of the Endangered Species Act, and is, at times, indolent in its compliance with the federal government’s wishes.
It didn’t draw up a plan to adequately manage the gray wolf last winter, according to a federal judge who mandated that Wyoming return the control of Wolf populations back to the federal government, while letting Utah and Idaho manage their own.

But officials say the wolf’s impact on its ranching industry is smaller than the monetary detriment a sage grouse listing would bring to the state of Wyoming. Bob Budd, director of the Sage Grouse implementation team, said in an interview that the wolf listing affected a handful of counties, but the sage grouse would affect 20 of 23.

“What I have is an obsession with making sure that the economy of this state continues to function, and it won’t if that bird gets listed,” Freudenthal said in his speech. “An Endangered Species Act listing of the sage grouse would mean nearly 80 percent of the coal production in Wyoming would be affected, 83 percent of the natural gas production and 64 percent of the oil production would be affected. Almost 40 percent of our private lands would be affected, combined with almost 65 percent of all state grazing leases.”

 Aaron Clark, an energy infrastructure advisor to Governor Freudenthal, put it bluntly in an interview with JHWeekly, “We’d like for (Washington) to give us a get out of jail free card on the sage grouse.”

Though they are not a free pass, Candidate Conservation Agreements (CCA) and Candidate Conservation Agreements with Assurances (CCAA) could be the buffer that allows for certain activities to continue after a listing that would typically be precluded by one.

Landowners agree in their CCAA, and government organizations in their CCA, to abide by certain conservation measures for the bird if it becomes listed. So the “core areas” map is not only an effort to prevent listing, but it is the framework beneath the CCA and CCAA campaign that would allow certain activities to continue without prosecution under the Endangered Species Act.

And in Wyoming’s effort to get the pass, they have put wind on hold in many parts of the state.

Erik Molvar, a biologist with the Wyoming Chapter of the Biodiversity Conservation Alliance, was one of the few people at the conference who actually supported a listing of the sage grouse. He said that the government isn’t doing enough.
“The game the state is playing is they’re trying to avoid sage grouse listing, and they’re trying to do just enough to avoid sage grouse listing without inconveniencing the industries that bring in so much tax revenue to the state’s coffers,” he said in an interview with JHWeekly.

Molvar has his own map of critical habitat: “The continental divide, Crestin Field and Atlantic Rim were excluded, and the Landin Field avoided, even though they are the highest concentration of sage grouse populations,” Molvar said. “They left those out because those are the big, big oil and gas projects, and that’s 2,000 wells here, 8,950 here.”

When the governor levied his decision against wind development in sage grouse core habitat, million of dollars had already been invested in research and land purchases in those areas, according to industry officials at the conference.
And, when the map was designed, efforts were made to protect other extractive industries, but not wind.

“Right now over 86 percent of coal production is within prime sage grouse habitat,” Clark said. “And with the core areas strategy we’ve been able to remove all but four percent of coal production from those core areas.”

Wyoming wasn’t making any bones about it: It is saving incumbent industry from the grouse threat.

Resource pyramid
State officials made a sales pitch for wind resources in the southeastern portion of the state, where sage grouse are not as much of an issue. But that wind is slightly less strong and also more likely to impede the views from hobby ranches where wealthy Colorado front rangers like to retire, another major setback to development.

Cy Esphahanian, however, left the conference unsure. He is a wind developer, a managing member of Wind Revolutions LLC, in Denver.

“Several people said, ‘Hey don’t worry about the sage grouse core area,’ and that there’s so much good wind in southwestern Wyoming,” he said in an interview with with JHWeekly. “I’m a big believer in the resource pyramid, the highest quality is a small point and as you go down the pyramid more and more, you find stuff of a lesser quality. So, I do think that south central Wyoming is the pinnacle of wind in the United States - I think it’s the best wind around. Southeast is not quite as good. Is it good enough to bear the economic cost of taking it to California? I sure hope so.”

Sandvig said that the Simpson Ridge project, in central Wyoming, was the windiest in Horizon’s portfolio.

So is the wind industry being treated fairly?

“The Powder River Basin, which is where the coal bed methane industry wants to drill, mysteriously was left out of the core areas,” Molvar said. “And there’s no mystery here –it‘s because the oil and gas representatives that were in a collaborative group, that was the sage grouse implementation team, used their veto power to basically say there will not be any sage grouse protection in the areas they want to drill. And here’s also the Pinedale anticline, and Jonah Field too, and those were also excluded.”

Budd, who is director of Wyoming’s  Wildlife and Natural Resource Trust as well as the leader of the team that drew the map, said those areas sometimes have one gas well every five acres and are no longer good habitat.

“The habitat is historic, but its not functioning today, so to count that as core would be disingenious,” he said.

But Budd also added that the map is not ironclad.

“The reality is that nobody ever said the core areas are perfect, we’d be fools to do that,” he said. But he added that nothing will change until word comes back on the sage grouse listing.

“Obviously if you are in the wind business and have a project in a core area you are dissapointed, but that doesn’t mean those aren’t ever going to happen,” he said. “It means the state is taking this one step at a time and being careful to use the best science ... we are going to try and make sure we’ve got that species in a good position before we’re going to go out and do another action.”

The governor, for his part, thinks that people will still develop wind in Wyoming and he defends the oil and gas industries that, he said, have done their part to protect the bird and give back to the state.

Freudenthal said wind needs to wait, in order to ensure a good future for Wyoming.
“We are going to be the generation that sets the basic ground rules for how wind energy is developed in Wyoming,” he said. “It is going to be developed, but it doesn’t need to be rushed,“ JHW

Courtesy photo
Wind turbines

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