If offshore wind energy were the way of the future, government would not have to subsidize it at all, let alone to the tune of $1.7 billion.
Maryland Gov. Martin O'Malley, D, justifies the subsidy he will soon provide to offshore wind based on the industry's enormous upfront costs. He routinely fails to mention that investors routinely swallow large upfront costs to get a piece of industries that promise future profits. In the case of offshore wind, because the industry is not so promising, investors would never back it without O'Malley's massive pre-emptive government bailout.
O'Malley is campaigning already for the Democratic presidential nomination in 2016. This is the real reason behind the wind power subsidies he will soon sign into law. It is a sad reflection on the integrity of Democrats in the state legislature that they have rubber-stamped O'Malley's latest corporate welfare plan. Although Marylanders will pay only a small additional amount on average -- about $1.50 per month for residential customers, and a 1.5 percent surcharge on Maryland businesses -- every penny is being directed to businesses that have O'Malley's ear. By diffusing the costs of highly concentrated benefits, O'Malley has found a way to squeeze ordinary residents of his state even further than they are currently squeezed, enrich a few wealthy developers, and come off looking like some kind of environmentalist hero.
Particularly odious is the method by which O'Malley bought the votes he needed to make this proposal law -- with promises for set-asides for minority-owned businesses involved in bringing the wind power to market. As Senate Minority Leader E.J. Pipkin pointed out, a very small handful of black and Hispanic business owners in Maryland may get a good deal out of this, but in exchange, black and Hispanic residents of the state will be forced to cough up an estimated $660 million over the next two decades.
What they are getting in exchange is unnecessarily expensive electricity from off Maryland's coast. In reality, the future of electricity lies at the western end of the state in the natural gas industry. O'Malley's latest budget delays the use of hydraulic fracturing to take advantage of Maryland's shale gas reserves (at no cost to ratepayers or taxpayers) until at least August 2014, if even then.
Don't blame the people leaving Maryland for other states. It's hard to live under a governor who is so focused on his next job.