With both offshore wind development and dissent from fishing groups ramping up along the East Coast, Senator Ed Markey and Congressman Seth Moulton announced a plan Wednesday to establish a national fund to compensate potential economic loss suffered by the fishing industry.
Currently there is no federal framework that requires offshore wind developers to compensate fishermen for potential damages. Those include gear loss, habitat degradation, loss of historic fishing grounds and new fishing restrictions in areas leased for wind farms — all of which compound, fishermen say, to spell serious economic challenges to their industry.
In the absence of such compensation requirements, some developers have established their own funds, with their own oversight panels. Other developers have not yet established a compensation plan. Fishing groups have been critical of this approach, saying the government’s lack of clear requirements gives the offshore wind industry the upper hand in compensation negotiations, leaving it up to the fishermen to prove the impact on their livelihoods and up to developers to decide the extent to which they are responsible.
“Any ability left to the wind developers to choose their own procedures will always result in their taking the least expensive path most favorable to them, not commercial fishing,” the New Bedford Port Authority wrote in a letter to the director of the Bureau of Ocean Energy Management (BOEM) in August.
The draft legislation being introduced by Markey and Moulton aims to address that disparity.
“This legislative proposal would ensure there is a consistent and equitable system in place to assess, award and distribute funding for fishery compensation tied to offshore wind development,” the senator and congressman said in a joint statement.
The proposal uses the same template that has long been used to compensate the commercial fishing industry for damages caused by the oil and gas industries. It would establish a trust fund in the Treasury Department using revenue collected from offshore wind lease sales. It would also establish advisory committees within the regional NOAA Fisheries office to develop regional criteria for eligible claims and a process by which fishermen can apply.
The proposed legislation also pushes back against the current state-by-state or project-by-project strategy for fishery compensation, which Markey’s office described in a press release as creating “confusion for both the wind and the fishery industries.”
“That’s why we need a streamlined federal response,” Markey and Moulton said in their joint statement.
The proposal received cautious praise from some fishing groups that have previously been critical of BOEM’s approach to fisheries compensation.
“We are encouraged to see recognition of the inadequacies of existing laws and the need to address the serious impacts offshore wind development has to local seafood production,” said Lane Johnston, programs manager for the Responsible Offshore Development Alliance, a group advocating for the commercial fishing industry though the process of offshore wind development.
“It has always been a top priority of the New Bedford Port Authority to see a federally codified fisheries mitigation and compensation program established as soon as possible, and we are actively advocating for the development of such changes,” wrote Gordon Carr, director of the New Bedford Port Authority.
Kris Ohleth, executive director of policy think tank Special Initiative on Offshore Wind, which has been facilitating discussions with nine Northeast states for more than a year to develop a regional compensation fund for the fishing industry amid an absence of any federal framework, said she is enthusiastic about the proposal. “We are all interested in the same goal,” she said.
Others remain skeptical.
BOEM has already sold more than two dozen leases for wind development off the East Coast. This year alone, BOEM collected $4.37 billion from offshore wind developers in six lease sales totaling over 488,000 acres of federal ocean. It is unclear what percentage of BOEM’s lease sales would be allocated to the fisheries compensation fund — or if a percentage of previous lease sales would be retroactively included in the establishment of the fund.
Meghan Lapp, fisheries liaison for Seafreeze, a Rhode Island-based wholesale and fishing company, said in order for the legislation to be effective, it would have to retroactively include funding from leases that were already sold, adding that regulators and legislators are already behind the ball. She also questioned the potential funding structure, stating impacts are not analyzed at the lease sale stage, making it unclear if the funding would be adequate.
The proposal comes at a dissonant time for the offshore wind industry. Some wind developers have said supply chain issues, and proposed limitations on turbine locations to protect the endangered North Atlantic right whale, could threaten the commercial viability of their projects. Commonwealth Wind recently asked Massachusetts regulators to scrap their current utility contract with the state in order to negotiate a higher rate, stating that their wind farm “cannot be financed and built” under the existing contract.
Meanwhile, Gov. Baker announced on Tuesday $180 million in infrastructure funding for projects designed to support the offshore wind industry. Those funds come on top of the recently passed Inflation Reduction Act, in which tax credits for wind manufacturers were included among the $370 billion of clean energy measures.
A spokesman for the American Clean Power Association, which lobbies for the wind industry, declined to comment on the proposed legislation when reached by phone on Wednesday.
For all the potential benefits, compensation funds also have their own inequities. In 2007, a liquified natural gas terminal planned to be built along fishing grounds off the coast of Gloucester directed some $47 million towards fisheries mitigation. One group, the Gloucester Fishing Community Preservation Fund, received a $12.6 million slice of the pie, while others who fished in the same waters were left out entirely.
“I like that the conversation has started on a national level,” said Eric Hansen, who owns two New Bedford scallop vessels and also sits on the regional council for NOAA Fisheries. “I’m hopeful that all fishermen will be involved equally.” Markey’s office said it asks that all stakeholders reach out to his office to learn more about the proposal and provide feedback ahead of its finalization.
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