September 15, 2020 — The following was released by the Responsible Offshore Development Alliance:
New developments have raised serious questions regarding the economic and job benefits from offshore wind energy projects in U.S. waters. Unsubstantiated claims of significant economic growth and investment have exaggerated the benefits of offshore wind energy, and diminished the economic and cultural importance of sustainable American wild-caught fisheries.
Georgetown Economic Services: Benefits of Offshore Wind ‘Grossly Inflated’
A new study, conducted by Georgetown Economic Services (GES), finds that “[t]he claim that the huge investments in offshore wind would provide significant job and economic benefits in the U.S. has been grossly inflated.” The study also reaches an important conclusion: many of the jobs and benefits would actually go to the foreign-owned companies currently dominating the wind energy landscape, instead of creating local opportunities.
The study examined the potential permanent and temporary jobs that would be created by wind energy development in New England and the Mid-Atlantic, and the Vineyard Wind project in particular. It found that estimates for domestic permanent jobs are 3-4 times lower than those promised by the wind industry, and that companies will need to spend millions importing turbines and other equipment from Europe, as the U.S. lacks the relevant infrastructure.
“A careful investigation of the employment impact shows a surprisingly low number of positions at the more permanent level of actual operation and maintenance of the offshore wind electricity,” the study found.
Astonishingly, GES estimates of temporary employment were actually higher than wind energy industry estimates, indicating that temporary construction jobs are expected to go to skilled international workers rather than be sourced locally. Specifically, it found “the bulk of the jobs will be created overseas rather than here at home, and total domestic employment in manufacturing and construction is small when compared with employment in the manufacture of conventional equipment for power generation.”
Ignoring a Century of Jones Act Precedent
This troubling report arrives in the midst of a murky policy atmosphere. Vessels and crews from Europe constructed the two existing U.S. offshore wind energy projects without documentation of any domestic job creation, and there is no apparent movement toward requiring U.S. labor or materials in future projects.
The Jones Act requires items shipped within the U.S. to be transported on vessels that are built, owned, and operated by American citizens or permanent residents. U.S. Customs and Border Protection (CBP), however, has never issued guidance as to how this law applies to offshore wind energy.
In July, CBP issued a “ruling letter” stating that the installation of turbines for the Vineyard Wind project using a non-Jones Act qualified (i.e. foreign-flagged) jack-up vessel would not violate the Jones Act. CBP then abruptly revoked that ruling just a few weeks later, citing uncertainty whether the Jones Act extends to wind energy activities more than 3 miles offshore at all. This appears to create a blanket exemption absent congressional or judicial action, despite the fishing industry’s subjugation to protectionist laws and other industries’ similarly heavy regulation under “Buy America” provisions.
This cannot be the government’s intended consequence. One could make a reasonable argument for the use of European jack-up vessels for limited offshore construction, as occurs in oil and gas, when such vessels do not exist in the U.S. But granting carte blanche to bypass domestic investment in a new heavy industry is economically and politically myopic, particularly given the burgeoning offshore wind energy industry in countries like China that are at the cusp of becoming key competitors in this field.
Manhattan Institute: “The Dismal Economics of Offshore Wind”
The GES study’s findings are consistent with other recent reports finding issues with how offshore wind energy is being promoted and developed. A study recently released by the Manhattan Institute also criticized the long-term economic prospects of offshore wind power, finding that “[a]bsent continued subsidies… it is unlikely that any offshore wind facilities will be developed.” The actual costs to ratepayers are likely far greater than advertised in part because experience from Europe has shown “that the performance of offshore wind turbines degrades rapidly.”
Unions Cast Doubt on Domestic Workforce Benefits
The quality of offshore wind jobs is also in question. A North America’s Building Trades Unions report examining the difference across energy industries found that tradespeople “consider projects in oil and natural gas to have better perceived wages, benefits, and opportunities than renewables projects,” and that those projects have longer durations. Moreover, it found “skilled trade jobs are not highly interchangeable between [the natural gas and renewables] industries.”
Failure to Consider Negative Effects on Seafood Sector Employment
In July, a study from the Science Center for Marine Fisheries found that officials at the Bureau of Ocean Energy Management (BOEM) were not giving sufficient attention to the potential negative impact of offshore wind on existing ocean use jobs. Estimates of economic and employment benefits promoted by wind energy advocates also consistently ignore the displacement of jobs and revenue from fishing and existing energy industries.
Preservation of Fisheries Jobs Demands Caution and Oversight
As the federal government deliberates approval of Vineyard Wind—the first such commercial-scale project in the United States—the American public should be highly concerned over misrepresentation of the economic benefits of offshore wind energy. Many state governments and well-funded trade associations are promoting this new industry as a major win for states and ports, providing both jobs and economic growth. However, once permits are issued there is currently no way to monitor or enforce the fulfillment of these promises. Reasoned decisions depend on verification of these claims before jeopardizing the industries that already support our coastal communities.