How to Ruin America, Part II - You Won't Believe It!

You got firsthand evidence this week of a new beginning in the government green grab. Leading the Obama green initiative, interior secretary Ken Salazar announced the approval for Cape Wind, a 130-wind-turbine farm off the southern coast of Cape Cod between Martha’s Vineyard and Nantucket, not too far from Woods Hole, Massachusetts. It is a new beginning for the Radical Progressive Movement’s (RPM’s) idealistic green dream, which will dig a deeper hole in taxpayers’ pockets. This should come as no surprise to those of you who have been paying attention.

Let me be clear. I am all for renewable energy. But the feeling I’m getting about Cape Wind is that this is less about the environment and more about equal justice and the redistribution of your wealth. Don’t be deceived by the argument that Cape Wind helps our energy independence from foreign oil; oil is used more for transportation, not generating electricity. As it stands today, oil is a very small player in electricity generation. Coal is the country’s main source of electricity, followed by natural gas. In order to control costs, America’s prime focus should be on energy efficiency, followed by cleaner coal, and natural gas. Wind is expensive. It’s worth noting that Denmark derives about 20% of its electricity from wind power, and its electricity costs are roughly three times higher than those in the U.S.

The RPM green grab was laid out on paper years ago, and they have been patiently waiting until their men were in place. Look no further than the chapter “Building a Vibrant Low-Carbon Economy” in Change for America: A Progressive Blueprint for the 44^th President, where Bracken Hendricks and former green jobs czar Van Jones write, “The best way to address our climate and energy crises is to build a more prosperous green economy—strong enough to lift millions of Americans out of poverty and into a stronger middle class.”

Hendricks was a special assistant to green-machine vice president Al Gore. He also served with the Department of Commerce’s NOAA, whose National Fisheries Service Northeast shares a 3.4-acre site on Vineyard Sound with the Woods Hole Research Center. Current science czar John Holdren was the former head of the Woods Hole Research Center and has been at the center of the climategate scandal. Is it possible there’s a link between team Obama, the RPM, and the Cape Wind project? I’m just trying to connect the dots here.

On Wednesday, Salazar, flanked by Obama-friend and Massachusetts governor Deval Patrick, announced his approval of the Cape Wind project. Having sailed my entire life in these waters, I can tell you that the winds in this spot are variable at best, and not likely to create anywhere near the consistency in power that’s projected. I question the placement not only because of my own bias, which of course exists (and I’ll get to that in a minute), but from a commonsense point of view. Why place the wind farm where the wind is somewhat blocked by the land mass of the Vineyard? Much better wind is further offshore. Choosing this location is like having one productive oil well when the Saudi Arabia of wind is further offshore.

You might be thinking, well, Smith doesn’t want wind turbines in his backyard. And that’s true, I don’t. But imagine for a moment, if you will, what it’s like to live in New England. For better or worse, you get a sense of being enclosed here, by close neighborhoods, tight winding roads, and limited access to the water, which may come as a surprise to some. We don’t all have waterfront views. Yes, there are places to escape to for an open Midwest feeling, but for many of us the ocean is the one great escape enjoyed by all. It’s the biggest reason this area is a top 10 destination for tourists. Proponents will argue that the wind turbines will be five miles offshore and barely visible from land. But imagine putting these barely visible wind turbines along the Grand Canyon, Yosemite, or Yellowstone. How unthinkable is that? The expanse of the open ocean is part of what makes the ocean views of New England a national treasure. Believe me, if you sail from Woods Hole to Nantucket, they’ll be more than barely visible.

Earlier this year, Salazar announced he would bring more scrutiny and a greater public voice on how oil and gas leases are awarded on public lands, potentially slowing the development of the nation’s natural gas resource, which is like the Saudi Arabia of natural gas. Why hold back natural gas? The government favors wind because it has a vast amount of control in wind permitting. In fact, in 2001 the federal government passed a law selecting the Department of the Interior’s Minerals Management Service (MMS) as the coordinating federal authority for granting wind permits.

Government transparency is lacking with Cape Wind. Which reminds me, have you ever seen a wind turbine not working on a windy day? I see it all the time in Portsmouth, Rhode Island. It’s anecdotal evidence, but it tells me that the nameplate capacity of these wind turbines will be well above what they actually generate. They surely aren’t going to run 24/7. Have you ever seen what salt water does to mechanical parts? Imagine the taxpayer-funded maintenance costs this saltwater wind farm will create. And it’s estimated that electricity prices are not likely to fall for Massachusetts—at least, not without help from the rest of America through subsidies and tax credits. Estimates put Massachusetts tax credits at $1 billion and an additional $300 million from Federal Production Tax Credits. The breakeven is years from now.

With the Cape Wind approval, Salazar is in essence giving the green light to a controversial wind farm, while holding back the development of one of our most abundant and affordable energy sources: natural gas.

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E.J. Smith - Your Survival Guy

Preparing your investments and family for when disaster strikes.

E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.