Nine Northeastern and Mid-Atlantic states are seeking input from fisheries and other stakeholders on a plan to create a compensation fund for commercial and for-hire recreational fishing businesses that suffer economic damage from the development of offshore wind projects.

The states — Maine, New Hampshire, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Maryland and Virginia — on Monday issued a request for information (RFI) seeking stakeholder input on the plan to “establish a regional fisheries compensatory mitigation fund administrator.” The RFI aims to secure input from “impacted members of the fishing industry” as well as offshore wind developers, corporate and financial management entities and interested members of the public.

The fund, if it goes ahead, would provide a source of assistance and compensation for fisheries that find their business and income damaged by the construction or operation of the wind projects, said Kris Ohleth, director of the Special Initiative on Offshore Wind, an independent non-profit organization that promotes wind energy and helped organize the interstate collaboration on the issue.

“So, if you are a fisherman who’s fishing, who is home porting in Virginia, and you fish for scallops off the coast of Massachusetts, you are eligible to apply if you can demonstrate that where you fish before is no longer available to you and it’s impacted your revenue,” she said. “That’s the way the states are envisioning it.”

The proposal addresses an issue that has stirred persistent opposition to offshore wind projects along the East Coast, and elsewhere, where commercial fishermen fear that project construction will damage marine wildlife and prevent them from fishing their regular locations. The fishing industry between Maine and South Carolina caught fish valued at $2.1 billion in 2019 and employed about 360,000 people, according to a scoping document put together by the nine states in preparation for the RFI.

In New Jersey, for example, clam industry representatives have expressed concern that the weight of clam dredges, which can weigh 5 to 7 tons when empty, and other nets, combined with unpredictable winds and currents through the turbines, will make it difficult and dangerous for fishing boats to maneuver around them once they are built. (See Fishermen Fear the Impact of NJ Wind Farms.)

In Massachusetts, lobstermen have expressed concern that their livelihood will be threatened by the construction of offshore wind turbines and embedding of power cables into the ocean floor to transmit the wind power. (See Massachusetts Fishermen Brace for Offshore Wind.)

A study by Rutgers University concluded in July that offshore wind projects on the East Coast could cut revenue in the $30 million surf clam industry by 3% to 15%. The study, which was funded by the U.S. Bureau of Ocean Energy Management (BOEM), said the presence of the turbines in the water could mean that some clamming vessels will make fewer trips, go to different — more distant — fishing areas and so harvest fewer clams, cutting their earnings. Those changes could also increase average costs by 1% to 5%, according to the study.

Trust Fund

The idea for a pool grew out of the framework released by BOEM in June, which set a goal of mitigating the impact of offshore wind projects on the fishing industry. The framework recommended that developers provide reimbursement for “for fisheries gear loss and damage resulting” from developer actions.

Seeing the benefits of collaborating and sharing experiences on issues such as permitting challenges, natural resource consideration and scheduling issues, the nine states had earlier written President Biden about the need for a coordinated offshore wind policy. In a June 2021 letter, they offered several recommendations for how the federal government could support states in the development of wind projects, including suggestions to plan from a longer- term perspective.

“The states are really motivated to get this work done,” said Ohleth. But they saw the “less than ideal” experience of the first two offshore wind projects in the U.S. — South Fork off the New York coast and Vineyard Wind off Martha’s Vineyard in Massachusetts — that handled the fisheries mitigation on a project-by-project level.

“In both cases, there was a lot of consternation,” she said. “There was a lot of issues with fishermen not trusting developers, developers not trusting fishermen, and the state is getting stuck in the middle as the arbiters of the deal.”

Ohleth said the question of compensation is always at the forefront of fishermen’s minds and providing an established fund to meet that concern would enable the states and the industry to address deeper questions.

“We’re attempting to take that question off the table,” she said. With that in place, “we can evolve to … higher order conversations about adaptability, about vessel diversification, about fishermen participating in the offshore wind space … It’s too scary for fishermen to think about that until they have their bottom line met.”

Beyond Compensation

The RFI poses a range of questions about the proposed fund and how it should be managed, seeking responses from the public, the commercial and for-hire recreational fishing industry, the renewable energy industry, corporate and financial managers, and others with knowledge of offshore wind energy siting and development. Questions include: What should be the purpose of the fund? How should the administrator handle claims? What kind of appeals process should be in place? And what role should states play in the fund?

The group will receive comments between Dec. 12 and Jan. 31 and expects to start seeking a regional fund administrator for the program in the spring.

The scoping document put together by the nine states says that “because coastal states are reliant on seafood as part of their complex economic portfolios, they are committed to ensuring sustainable seafood and domestic food security be maintained into the future.”

Yet “the junction of OSW and fishing is a complex intersection, where solutions are needed to advance the long-term sustainability of both industries,” the document says.

Compensation is the “last step” that states should consider in seeking to help the fishing industry, the document says. States and their developers should first focus on avoiding an impact on the industry or, if that is not possible, on minimizing or mitigating the effect, the document says. Still, a compensation plan is “vital to ensuring coexistence of robust and dynamic OSW energy and fishing industries,” the document says.

It adds that “experience to date with siting and development of OSW energy in the region indicates that a standardized framework is necessary to ensure compensation in addressing aggregated adverse economic effects on fisheries equitably and efficiently.”

The scoping document says the administrator would consider both revenue losses and the additional costs paid by fishing interests because of the wind projects. The revenue losses could include displacement of the interests from their fishing area; the transition from highly productive to less productive fishing grounds; reduced fish catch in lease areas; and the devaluation of fishing businesses.

Additional costs could include: the need to acquire new or modified gear, including navigational equipment; extended transit times to get to new fishing areas; increased insurance costs and higher dockage and offloading fees due to competition for “limited space in ports and harbors.”