Koch Brother Wages 12-Year Fight Over Wind Farm

Source: By KATHARINE Q. SEELYE, New York Times • Posted: Wednesday, October 23, 2013

Stephen Rose. “I’ve had the Turkish mafia after me, so bring it on, baby.” WILLIAM I. KOCH, who has fought a proposed wind farm for more than a decade, on environmental groups’ threats

OSTERVILLE, Mass. — If the vast wind farm proposed for Nantucket Sound is ever built, William I. Koch will have a spectacular view of it.

Of course, that is the last thing he wants. Mr. Koch, a billionaire industrialist who made his fortune in fossil fuels and whose better-known brothers underwrite conservative political causes, has been fighting the wind farm, called Cape Wind, for more than a decade, donating about $5 million and leading an adversarial group against it. He believes that Cape Wind’s 130 industrial turbines would not only create what he calls “visual pollution” but also increase the cost of electricity for everyone.

Now, as if placing a bet on the outcome of the battle, Mr. Koch, 73, who has owned an exclusive summer compound here for years, has acquired an even grander one — Rachel Mellon’s 26-acre waterfront estate in the gated community of Oyster Harbors, for $19.5 million. He has also bought the nearby 12-plus-acre Dupont estate. All of this adds up to a prime perch over Nantucket Sound.

“I love the area,” Mr. Koch said in an e-mail. “The ability to acquire a special property where I can create a family compound for my children and extended family was and is very meaningful to me.” (His current home, in the same gated community, is on the market for $15 million.)

At one time, Cape Wind — which would produce 75 percent of the power for Cape Cod, Martha’s Vineyard and Nantucket — was expected to be the first offshore wind farm in the country, and supporters hoped it would serve as a catalyst for other offshore wind projects like those that ring Europe. But after more than a dozen years, the $2.6 billion proposal remains on the drawing board, thanks in large part to the Alliance to Protect Nantucket Sound, of which Mr. Koch is chairman.

Still, Jim Gordon, Cape Wind’s developer, who has spent $70 million of his own money on the project since 2001, vows that it will go forward. He said that he would qualify for certain federal tax credits by the end of the year and that the necessary financing would be in place, but he declined to disclose details, saying he did not want to give Mr. Koch a “road map” of his plans.

“This is a very sophisticated adversary,” Mr. Gordon said. “Koch has already spent a decade trying to push us off the path toward a better energy future.”

The two men have circled each other for a decade in an escalating test of wills. Mr. Gordon has tried unsuccessfully to enlist Mr. Koch, who once financed green energy plants, in his cause; Mr. Koch has successfully delayed Cape Wind for years by tying it up in court. A few lawsuits, some of them backed by the Nantucket Sound alliance, remain to be settled.

Audra Parker, chief executive of the alliance, is skeptical that Mr. Gordon can move ahead. His plans, she said, are “built on a house of cards.”

Mr. Gordon, for his part, contends that Mr. Koch “lives in a billionaire bubble” and that his efforts to block Cape Wind are self-defeating because climate change is already assaulting Cape Cod.

“Their beach is eroding, houses are falling into the sea, the ocean is getting warmer, lobsters are migrating away,” Mr. Gordon said in an interview in his Boston office. “It’s just sad that somebody who has the means to spend millions of dollars can hold something up that’s going to produce a lot of benefits for Massachusetts and this region.”

Major environmental groups support the wind farm as a necessary step toward reducing carbon emissions, and they are furious with Mr. Koch. But when he was warned last year that environmentalists were going to start attacking him and try to stop his other projects, he said he welcomed the fight.

“The environmentalists are already after me,” he told CommonWealth magazine in April. “I’ve had the Turkish government after me, I’ve had the I.R.S. after me and I’ve had a $50-billion-a-year corporation after me. I’ve had the Turkish mafia after me, so bring it on, baby.”

Combative, flamboyant and litigious, Mr. Koch does not shy away from public scrapes. He has been involved in dozens of lawsuits over the years, including a tangled case against his own brothers that went on for two decades and that Forbes called “perhaps the nastiest family feud in American business history.”

Like his brothers David and Charles, who own Koch Industries Inc., Bill Koch is a billionaire, though not on the same order of magnitude. Forbes listed him in September as the 122nd richest person in the United States, with a net worth of $3.8 billion; his brothers are tied for fourth, with a net worth of $36 billion each.

David and Charles Koch, who are more conservative, use their money to promote political movements like the Tea Party, to back a libertarian social agenda and to protect their extensive fossil fuel holdings; Bill spends his on an array of passions, including sailing (he won the America’s Cup in 1992) and collecting wine, art (a wing at the Museum of Fine Arts, Boston is named for him) and Western memorabilia (he bought a ghost town in Colorado and is converting it into an authentic frontier settlement).

But Bill Koch, who founded Oxbow, a fossil-fuel-based company, three decades ago, has also been stepping up his political donations. He is spending millions to beat back environmental regulations and giving more than ever to like-minded politicians. He told CommonWealth magazine that he wanted to help elect people “who understand how foolhardy alternative energy is.”

His political contributions are generally less ideological than those of his brothers and are focused chiefly on advancing his business interests. Last year, Oxbow donated its largest amount ever, $4.35 million, to so-called super political action committees, according to the Center for Public Integrity.

Mr. Koch has donated to both Democrats and Republicans; the determining factor, he said, is whether they support policies that will benefit Oxbow. Recently, most of his recipients have been Republicans, including many House leaders who are seeking re-election next year.

Some say his protection of his fossil fuel interests goes hand-in-hand with his opposition to Cape Wind.

“No renewable energy resource holds as much potential as offshore wind to displace many, many, many gigawatts of dirty, carbon-intensive resources,” said Sue Reid, vice president and director of the Massachusetts office of the Conservation Law Foundation, which supports Cape Wind.

Mr. Koch has said that the most persuasive arguments against Cape Wind are economic, arguing that the project relies on government subsidies that could vanish tomorrow and that it would raise the cost of electricity, not lower it.

That point was bolstered last month by news that the biggest utilities in Massachusetts had signed contracts to buy land-based wind power from Maine and New Hampshire for 8 cents per kilowatt-hour; Cape Wind, by comparison, has contracts with those same utilities to start at 19 cents per kilowatt-hour, with built-in escalation clauses of 3.5 percent a year. Ms. Parker of the Nantucket Sound alliance called this news “the death knell for Cape Wind.”

But Mr. Gordon, the Cape Wind developer, said that his offshore turbines would produce power more consistently, at peak demand, than those in Maine and New Hampshire, and that he would be delivering power reliably to “the fastest-growing electric load demand center in New England.”

And, he said, he was confident that Cape Wind would one day be up and running.

Mr. Koch was just as certain that it would never be built. “I am equally confident,” he said in his e-mail, “that the project’s lack of merit will result in its demise.”