BOSTON – With federal approval behind them, developers of what would be the nation's first offshore wind farm still have a tough journey ahead before finally producing power in the waters off Cape Cod.
On Wednesday, the Obama administration approved the 130-turbine Cape Wind project in Nantucket Sound, and developers say they want to generate power by 2012.
Interior Secretary Ken Salazar's decision "allows our nation to harness an abundant and inexhaustible clean energy source for greater energy independence, a healthier environment and green jobs," Cape Wind president Jim Gordon said.
But opponents vow to kill the project in the courts, and the litigation could tie up development plans or scare off investors. If not, Cape Wind still faces major challenges to reach a deal with a local utility to purchase its power and to obtain financing for a project estimated to cost at least $2 billion.
Salazar's approval was a big step forward for Cape Wind, but not near the last one, said R.J. Lyman, assistant environmental secretary under former Massachusetts Gov. William Weld and a partner at the Boston law firm Goodwin Procter.
"What this is, they've now succeeded in getting an invitation to the dance," Lyman said. "The question is, how well are they going to do at the party?"
Developers of Cape Wind, which was proposed in 2001, say it will provide a reliable, domestic renewable energy source and eventually supply three quarters of the power to the Cape's 225,000 residents. Offshore wind advocates are also hoping it will spark a new American industry, which has lagged behind the offshore wind business in Europe and China.
But Cape Wind has faced intense opposition from some environmentalists and residents, including the late Sen. Edward M. Kennedy, who fought the project as a special interest giveaway.
Others predict harm to local wildlife, increasing electricity costs and damage to historic vistas. Two Indian tribes said Cape Wind would destroy sacred rituals and could disturb tribal burial grounds, and one has promised to sue.
Audra Parker, a Cape resident and head of the chief opposition group, The Alliance to Protect Nantucket Sound, said the project is so flawed the courts will inevitably overturn Salazar's decision.
But Salazar said the project was part of a "new direction in our nation's energy future" and would withstand court scrutiny.
As part of litigation, Cape Wind opponents plan to seek a preliminary injunction to stop construction on the project while their complaints are pending, which could lead to damaging delays.
Still opponents must show, in part, that their suits are likely to succeed. And that's a "really, really high bar for them to meet" because the comprehensive review the project has undergone has shown its merits, said Sue Reid, an attorney for the Conservation Law Foundation, a Cape Wind supporter.
But even without an injunction, the litigation may scare off some investors, Reid said. The project could get millions in federal stimulus money and tax credits but will be largely funded by private dollars.
"Some investment banks might be willing to put up that capital with litigation pending; others may not," Reid said.
Lyman thinks Cape Wind's biggest obstacle is quickly reaching a deal to sell power to a local utility. The project can't work without such a deal, he said, comparing it to building an office building but not securing tenants.
Cape Wind has been in negotiations with National Grid for a deal, but those haven't come easy for offshore projects.
In Rhode Island, regulators recently rejected a power purchase agreement between National Grid and the developer of a proposed wind farm off Block Island, citing the high cost of its electricity compared to power from conventional sources.
Massachusetts officials have emphasized that the price Cape Wind and National Grid agree on must be affordable for ratepayers.
Lyman wondered whether Cape Wind could reach an acceptable deal, considering its resources have likely been severely stretched by a long fight to win federal approval.
"I do know these guys are creative and thoughtful, and if anyone can do it, they can," Lyman said. "I just don't know if anyone can do it."
A Cape Wind spokesman did not immediately return a call for comment Wednesday.
Reid said that even with what's ahead, the challenge behind was huge. She's optimistic Cape Wind can be up and running by 2012.
"Getting this federal approval was the biggest hurdle to overcome," she said.
HONG KONG – Asian stock markets were little changed Thursday after two days of selling, with investors treading cautiously after Spain became the third European country this week hit with a downgrade of its debt.
The dollar, meanwhile, gained against the euro and fell against the yen, and oil prices slipped toward $83 a barrel.
The European debt crisis spread Wednesday when Standard & Poor's lowered its credit rating for Spain amid concerns about the country's growth prospects following the collapse of a construction bubble. Markets went into a tailspin the day before after S&P slashed its credit ratings on Greece and Portugal. Greece's debt was cut to junk status.
But sentiment was helped by an overnight gain on Wall Street, where stocks finished higher after the Federal Reserve offered modest reassurances about the world's largest economy.
The central bank, at the end of a two-day policy meeting, said the labor market is "beginning to improve" and it noted that housing starts have edged up. It expects to keep rates low for an "extended period" to help strengthen the economy.
Hong Kong's Hang Seng was down 0.1 percent at 20,932.17 and South Korea's Kospi shed 0.3 percent to 1,729.08.
Shanghai's market gained 0.5 percent. Elsewhere, Singapore's index was up 0.6 percent, Taiwan's market added 0.1 percent and Malaysia's benchmark was up 0.2 percent.
Japan's market was closed for a holiday.
In currencies, the dollar traded at 93.87 yen compared to 94.16 yen. The euro fell to $1.3185.
The benchmark oil contract shed 5 cents to $83.17 a barrel in Asian trade.
In Europe Wednesday, markets suffered another a loss as investors held out hope the key actors in the Greek debt drama will soon rescue the debt-laden country. Germany, the International Monetary Fund and the European Central Bank all suggested the bailout agreed to earlier this month would soon be released.
However, with so much uncertainty surrounding Greece and other European nations struggling with high debt loads and deficits, analysts said respite in most markets was unlikely to last.
"Fiscal issues in the eurozone's periphery will come back to haunt investors, and we have likely not seen the worst of it yet," Dariusz Kowalczyk, chief investment strategist for SJS Markets in Hong Kong, said in a note.
On Wall Street overnight, the Dow rose 53.28, or 0.5 percent, to 11,045.27.
The Standard & Poor's 500 index rose 7.65, or 0.7 percent, to 1,191.36, while the Nasdaq composite index rose 0.26, or 0.01 percent, to 2,471.73.
WASHINGTON – Republicans abandoned their blockade against legislation to clamp tough new controls on Wall Street Wednesday, clearing a road to likely passage for the most sweeping rewrite of financial rules since the Great Depression.
Democrats and Republicans agree the Senate will ultimately pass landmark changes aimed at preventing a recurrence of the crisis that knocked the nation's financial system to its knees in 2008, but the battle now begins over crucial details. The House has already passed its version.
Democrats said the Republicans had given in after three days of votes to block debate, realizing they were on the losing end of a battle for public opinion. GOP lawmakers said they would now switch to trying to change the bill on the Senate floor.
Sen. Sheldon Whitehouse, D-R.I., said, "There's been immense pressure bottled up inside the Republican caucus through these last three votes. A lot of their members have been very deeply unhappy with the direction their leadership has been taking them. Better heads prevailed."
Democrats had threatened to hold the Senate in session all night making their case that the Republicans were stalling legislation of importance to virtually every American. The Democrats also have been laying plans to make the legislation a major issue in midterm elections this summer and fall. The Republican retreat came one day after senior executives of Wall Street giant Goldman Sachs were denounced by lawmakers from both parties at a marathon Senate hearing.
President Barack Obama, winding up a Midwest tour promoting the legislation, told reporters he was pleased the debate would proceed and that he hoped to sign a final version "very soon." That was unlikely to occur for at least two weeks.
"We'll end up having a safer, more secure financial system," Obama said, "and I think banks and other financial institutions can get back to making money the old-fashioned way by lending it to companies to build business and create jobs and do all the things we want our financial system to do."
In the debate that now can proceed, both Democrats and Republicans will attempt to change the underlying bill. Republicans will take particular aim at the magnitude of consumer-protection provisions that Obama says are vital. Liberal Democrats are expected to seek to limit the size of banks.
The GOP decision to relent came after Sen. Richard Shelby, the top Republican on the Senate Banking committee, told his colleagues that he could win no further concessions from Banking Committee Chairman Chris Dodd in private talks. He said Dodd did agree to adjust some provisions that Republicans had complained would permit further bank bailouts.
But there were already signs that some Republicans were growing weary of continuing to block the bill after Obama and other Democrats accused them of siding with Wall Street, an institution that rivals Congress in its unpopularity.
"The point of all of this was to make sure that as long as those discussions could bear results that we would support that effort," Republican Sen. Olympia Snowe of Maine said of her party's objections. "Now we proceed to the floor for amendments on the remainder of the bill."
"It is not just Republicans who are going to offer amendments," said Sen. Bob Corker, a Tennessee Republican who negotiated with Dodd on portions of the bill. "This may be a real debate, which would shock America."
How the debate unfolds will determine whether the legislation achieves significant bipartisan support. Democrats still need 60 votes to get past procedural obstacles, a number they can't reach without at least one Republican on their side.
The bill would establish a nine-member Financial Services Oversight Council, including the treasury secretary, Federal Reserve chairman and the heads of regulatory agencies to monitor markets for threats, such as the bubble in housing prices and mortgage-backed securities that preceded the financial near-collapse two years ago.
The Federal Reserve would begin policing large bank holding companies and interconnected nonbank institutions whose collapse might pose a threat to the economy. With approval of the council, the Fed could even break up complex companies that posed a grave threat.
Most investment derivatives — such as the hundreds of billions of dollars in complex instruments blamed for accelerating the crisis two years ago — would have to be traded on regulated exchanges.
Shelby said Wednesday he had received assurances that Democrats would adjust the bill to address GOP concerns that it would perpetuate bailouts of banks.
"Now that those bipartisan negotiations have ended, it is my hope that the majority's avowed interest in improving this legislation on the Senate floor is genuine and the partisan gamesmanship is over," said Senate Republican leader Mitch McConnell.
Dodd said his talks with Shelby had been productive. "But I cannot agree to his desire to weaken consumer protections given the enormous abuses we have seen."
Republicans said they now expect Democrats to jettison a $50 billion fund that would have been financed by banks to help liquidate large failing institutions. The Republicans said they also expect Democrats to tighten language so the bill would mandate that shareholders' stakes in a failing firm be wiped out. The current bill says there would be that presumption.
Democrats tried three times to begin debate on the bill only to be thwarted by Republican opposition. Democrats branded the Republicans as Wall Street allies. But Republicans said they were merely trying to secure changes to make the bill more bipartisan.
Republicans have begun to focus their criticism on the consumer protection provision.
The Senate Democrats' bill would create a Consumer Financial Protection Bureau within the Federal Reserve that would have power to police transactions between institutions that provide financial services and their customers.
Republicans say the bill would have unintended consequences that could ensnare small business people for merely extending credit to their customers.
By a 56-42 vote Wednesday, Democrats failed for a third time to get the necessary 60 votes to move the legislation to the Senate floor for debate. Democrats had threatened to keep the Senate in session into the night and were preparing to hold more votes testing Republican unity.
Associated Press writers Laurie Kellman and Julie Pace contributed to this report.