By David G. Tuerck | February 8, 2010

Back in the 1950s, the standard Western movie would include a scene in which some dignitary from Washington would meet with an Indian chief and his council in the hope of resolving grievances that had sent the Indians on the warpath. The other day, we got a replay of that scene when a real-life government dignitary sailed into Nantucket Sound with a group of Wampanoag Indians for the ostensible purpose of resolving their grievances.

The parallel is striking: Then, as now, the squabble was over real estate. Then it was usually about hunting grounds onto which white settlers had encroached. Now it’s about the seabed under Nantucket Sound where the Wampanoags’ ancestors are buried and where developers want to install 130 wind turbines, all taller than the Statue of Liberty.

This true-to-life 2010 version of the old Western stars Ken Salazar, U.S. Secretary of the Interior, in the role of the government dignitary. A few days ago, Salazar showed up wearing his cowboy hat (yes, his cowboy hat!) to meet with the Wampanoags over what had emerged as the last obstacle to the wind turbine project. The project, which has been in the works for over nine years, was on the verge of approval when the Wampanoags started pressing their grievances. After all this time, the developers, who go by the name of Cape Wind Associates, do not want to see their efforts thwarted by the Wampanoags or anyone else.

To the casual observer, this is just a clash between culture and progress. It turns out, however, that the Wampanoags have logic, as well as culture, on their side. That’s because the Cape Wind project is, by any standard, an enormous boondoggle for which there is no defense, at least in terms of economic logic.

In 2008, the Beacon Hill Institute tallied up the social costs and benefits of the project. The social costs consist of the resources that would be used up installing, maintaining and operating the turbines plus a small charge for the negative aesthetic effects of the project, as revealed by a survey of tourists and homeowners. The benefits consist of the saving in fossil fuel consumption that the project would make possible, the avoided capital costs of installing gas-fired plants, the health benefits of the reduced volume of noxious pollutants and the benefits of increased energy independence and reduced CO2 emissions. We found that the costs would come to $2.2 billion and the benefits to $1.2 billion. Costs would exceed benefits by $1 billion.

Why then do the developers want to go ahead with the project? The answer is not that they can find fault with our analysis or show that the social benefits exceed the costs. It is that they would receive more than a billion dollars in subsidies from taxpayers and rate payers, a consideration that makes the project financially viable – or so they believe, anyway.

The Department of the Interior, which has the final say on the project, does not want to be bothered with anything that economics has to say here. The reason is that the entire green-energy, green-jobs movement by which the Obama administration is enthralled is not driven by facts or logic. Rather, it is a secular religion, driven by faith.

The Wampanoags believe that they are the People of the First Light who must greet the sun in the morning from the shores of Cape Cod, their view unobstructed by gargantuan wind turbines strewn across the horizon. The proponents of wind power believe that they must do anything, however objectionable on aesthetic, cultural or cost-benefit grounds, to appease the god of climate change, with the added inducement that someone stands to make money in the process.

In this battle, the Wampanoags won a temporary victory when the National Park Service ruled that Nantucket Sound was eligible for listing on the National Register of Historic Places. Unfortunately for the Wampanoags, however, the fix is in. The turbines are going up, ancestral burying grounds and cost-benefit analysis be damned.

So it’s the same old story. Dignitary from Washington assures Indians that he’ll consider their grievances, and the Indians take heart in being heard. Then the same dignitary ignores their grievances and the Indians surrender another piece of real estate. The only difference is that in the Old West, the operative slogan was manifest destiny, not green energy. Different era, different slogan, same result.
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David G. Tuerck is Executive Director, the Beacon Hill Institute, and Chairman and Professor of Economics at Suffolk University.