Amid an absence of a federal framework or authority, nine Northeast states have set out to develop a regional fund to compensate the fishing industry for impacts and economic losses caused by offshore wind development. After more than a year of discussion, they are now seeking feedback from both the wind and fishing industries.
Fishermen worry about gear loss and damage, loss of historic fishing grounds, negative impacts to fish habitats, increased insurance costs, and longer trips (and thus increased fuel expenses) as a result of wind development. They want the farms to avoid fishing grounds entirely, but when that’s not possible, regulations first call for minimization and mitigation. Compensation comes in when the conflicts cannot be avoided or minimized.
Due to a lack of a federal, standardized system, compensation up to this point has been decided on a project-by-project and state-by-state basis, including for Vineyard Wind south of Martha’s Vineyard, which allocated about $21 million for Massachusetts fishermen over the lifespan of the project.
“This has resulted in inconsistencies in estimating impacts to fisheries and the agreed-upon funds used to compensate for such impacts,” wrote the nine states to Amanda Lefton, director of the Bureau of Ocean Energy Management (BOEM), in a November of 2021 letter, adding the current approach may create inequities for the fishing and wind industries.
To address this, the states have been working to establish a “fund administrator” — which they say they assume will be funded by wind developers — that would, in a consistent way, collect funds, review claims and dispense funds to fishermen across the region for economic losses caused by offshore wind projects.
They issued a request for information (RFI) and scoping document on Monday, with public comments due by the end of January. According to the document, they estimate the fund could be in the hundreds of millions for the Atlantic states, where more than two dozen wind farms are set to be built
“The States recognize the importance of developing [offshore wind] as a clean and robust renewable regional energy resource to help transition away from reliance on fossil fuels and retaining thriving fisheries and the sustainable economic benefits they have long provided as the backbone and integral part of the identity of many coastal communities,” they wrote.
The American Clean Power Association, which lobbies for offshore wind development, supports the states’ efforts to develop a regional, third-party fisheries compensation fund in order to provide consistency and transparency for everyone involved, according to a comment letter to BOEM earlier this year.
BOEM has repeatedly said it lacks authority to create or manage a fund to compensate fishermen for offshore wind, and that such an ability would require congressional action. Decades ago, federal law established a government-managed fishermen’s compensation fund for oil and gas leases regarding gear loss and damage.
BOEM also lacks the authority to require contributions to a particular compensation fund, absent a previous commitment or obligation from the wind lessee. Wind developers can enter fishermen compensation agreements with state agencies. Then, BOEM can enforce the agreement through the final construction and operations plan approval.
However, there is no law that specifically requires compensation for economic loss from displacement attributed to offshore energy installations, according to state officials. They said legislative action might ultimately be required.
“The States are undertaking this effort with the acknowledgement that additional federal legislative or administrative actions may be necessary for some of the concepts, ideas, and proposals being put forth in this Scoping Document to be fully implemented,” they wrote.
During Zoom meetings earlier this month, state officials working on the proposed fund and fishermen grappled with the current lack of federal law on this front, some stating legislative action would be necessary to compel developers to financially contribute to the regional fund.
Gordon Carr, executive director of the New Bedford Port Authority, supported the states’ effort and said the work they’re doing will serve as a valuable framework for any future congressional action to codify fishermen’s compensation relating to wind development.
“I do think that ultimately the goal should be some federal codification and modifications to BOEM’s enabling act,” Carr said. “I think they’re genuine when they say all they can do is provide guidance, but that seems like an insufficient response.”
U.S. Rep. Paul Tonko (D-NY) has been working on new offshore wind legislation. A spokesperson for Tonko was vague on details last month as the bill was not yet finalized, but said the congressman has been working on a policy to develop a compensation fund for “impacted fishing interests.” The bill is expected to be introduced this month.
The states note the focus of their efforts at this time is not on the funding source, but on how the funding system will work once in place.
State officials working on the project have acknowledged the fishing industry’s frustrations, which were in some cases emphatically expressed during recent Zoom calls.
“I know that there have been a lot of wrongs in the past, and I think the states are trying to take a change of course and acknowledge that what has happened in the past does not necessarily need to be what happens in the future,” said Morgan Brunbauer, the offshore wind marine fisheries manager at New York State Energy Research & Development Authority, during one of the calls.
“While we may not have all of the answers to your questions … we are trying our best efforts to work on this as collaboratively as possible so that we are not leaving the industry behind,” he said, adding he’d rather be talking about how to keep fishermen fishing instead of how to compensate them for not fishing.
Brunbauer and other state officials encouraged the industry to formally provide comments upon the release of the RFI.
Maine, New Hampshire, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Maryland, and Virginia are the participating coastal states. Policy think tank Special Initiative on Offshore Wind has been facilitating the discussions.
All comments must be submitted to firstname.lastname@example.org with the subject line, “Regional Fund Administrator RFI” no later than 5 p.m. EST on Tuesday, Jan. 31, 2023. For more information on the proposal for a regional fund administrator, visit offshorewindpower.org/fisheries-mitigation-project.
Email Anastasia E. Lennon at email@example.com