Yesterday the Minerals Management Service (MMS) released its final Environmental Impact Statement (EIS) on the proposed Cape Wind offshore wind power development in Massachusetts, concluding that the project will have no significant negative environmental consequences. Release of the final EIS clears the way for the MMS to lease a portion of Nantucket Sound to Cape Wind, but it hardly makes the project a done deal. Cape Wind will still need to obtain additional permits and clear additional reviews from the Federal Aviation Administration and U.S. Coast Guard. Project opponents also promised litigation and other efforts to prevent the erection of wind turbines in the Sound. Senator Kennedy, for one, voiced his continued opposition and predicted any lease to Cape Wind would be overturned.

The Cape Wind experience illustrates how existing regulatory regimes are not particularly welcoming to alternative energy development. MMS offshore lease regulations, for instance, were designed for offshore oil and gas development, not windfarms. Cape Wind has had to face numerous regulatory reviews and overlapping requirements at various levels of government. If wind power and other alternative energy sources are to ever make a significant and cost-justified contribution to the nation's energy supply, the regulatory thicket will need to be cleared. The Bush Administration showed little interest in such an undertaking, despite its stated commitment to less onerous regulation and technological innovation. Perhaps the Obama Administration will recognize the need for innovation-enhancing regulatory reforms.