Wednesday, June 08, 2011

Wind Energy in Michigan: Will Ohio Win the Race for Offshore Turbine Manufacturing?

Radio goes video. Rather ironic, but a good idea nonetheless. Hope to see more of it, because the team at Michigan Radio does a pretty good job with the news as it is. Here is reporter Lester Graham's first video, "a brief look at the state of wind energy in Michigan, using information from the American Wind Energy Association and other sources".

"Michigan ranks 17th in the nation in wind energy potential, and fully developed, Michigan could produce 160% of its energy needs from wind", meaning we could turn around and sell the excess. And that doesn't even count the offshore potential, which is even greater. Wouldn't it be great to be an energy exporter, instead of importing expensive out-of-state coal? No brainer.

The video rightly points out that we are behind our neighbors in the Midwest when it comes to implementing wind energy, although once we get those new farms in the Thumb/Manistee area up and running, maybe we should revisit those statistics. Better do it fast though, because the geniuses running our state government now are not being aggressive about courting the industry - and Ohio is going to take the offshore turbine manufacturing business right out from under our boat. So to speak.

While our legislature is kicking the can down the road until fall when it comes to policy regarding offshore turbines, the folks in Cuyahoga County are already starting the buzz about cashing in on a planned offshore farm in Lake Erie, setting up revenue sharing agreements ...

John Kohlstrand, a spokesperson for Cuyahoga County Executive Ed FitzGerald, said the revenue-sharing agreement sets a precedent for the project as it grows. According to Lorain County Commissioner Ted Kalo, the goal is to erect about 250 turbines.

“When other land leases are reached for turbines that may be built in the future, this sets an example for the other projects that may not be located in Cuyahoga County,” Kohlstrand said. “The benefit here is by everyone working together, these multiple counties wouldn’t be feuding over the wind turbines.”

Initially, the Ohio Department of Natural Resources will receive half of the revenue from the leases for the underwater transmission lines, and the other half will be split across the four counties.

The revenue sharing is not the big money-maker here though. It's the jobs that are going to follow.

“We’re not talking about millions of dollars here,” Kohlstrand said of the region in general. “It’s important to keep in mind what the big picture is. The goal here is to create an environment where wind energy is creating jobs.”

Kalo estimates the first phase of the project would employ 600-800 people, but that it could ultimately employ up to 10,000-12,000 workers.

He described a race to install offshore wind turbines in the Great Lakes with competitors including Illinois, Michigan and New York.

“The first state who gets in the water will be the first state that starts the manufacturing,” Kalo said. “These are such large items . . . they want to be close to wherever they’re installing them. Freight is very expensive.”

While Ohio eats our lunch, here in Michigan it seems the Snyder administration is content to pat itself on the back at parties and sit on our tax code (while other states are busy slashing tax rates in a twisted new race to the bottom), and also make companies jump through the Legislature's hoops to receive incentives. The arrogant attitude is a bit stunning - and the latest edition of Michigan Votes has the legislature focusing on divisive matters such as helmet laws, more union busting, and more restrictions on women's health care. Just the kind of folks you want to present your business plans to, right?

Does anyone honestly think that businesses are going to wait around for a decision from lawmakers who are intent on playing politics, and risk butting up against a low yearly incentives cap, when other states are rolling out the red carpet and wining and dining this industry? Um, no. The Michigan Republicans have put more bureaucracy in the way of new development that would diversify our economy, and we are going to pay the price for it. Unfortunately, that is not going to become clear until it might be too late to do anything about it.

Here is but one story where we are already losing the race. Pray our economic development officials realize what is going on, and start making the moves to court this industry. Or, we can rest it all on autos once again - and watch what happens next.

On second thought, maybe not. God knows we have seen that movie before.