It's the Process, Stupid!

For part of every year, I live in the most libertarian state in America. My family and I have spent our summers and winter vacations in the same small cabin on a lake for more than 25 years. The town we live in has about 1350 residents (about 900 of whom are 18 or older). It spreads out over about 30 square miles. There is a state road running through the town that is zoned for commercial use; otherwise, the town, in its master plan has chosen to ban heavy industry (particularly oil and gas distribution centers and junk yards). So, the town doesn't offer many jobs and most people commute to work. The several lakes in the town and beautiful New England setting attract a lot of out-of-towners and vacationers. Right now, the residents are up-in-arms because the town has approved construction of an oil and gas distribution center in the commercial zone.  The site in question is in a 100 year flood zone, in a wetland and over an aquifer recharge area.

The story of how the project was approved is worth telling because it underscores, even in a state that is strongly anti-government, that people don't like it when someone, however well established in town, plays fast and loose with the rules of the game.  The landowner of the site got himself appointed head of the local Zoning Board. The Board heard the applicant's request for a zoning variance (making an exception and allowing heavy industry in a commercial zone) at a meeting when the public was not present. (The public wasn't present because notice of the meeting was placed in a newspaper in the state capital 30 miles away. Less than 1% of the town subscribes to that paper.)  At the meeting, the chair of the Board stepped down for a few minutes, recused himself, walked around to the other side of the microphone and presented his request for a variance.  During the discussion (with no legal counsel present), he advised his fellow Board members that they were empowered to grant the variance, and that's what they did. Almost all were newly appointed. (One member, in private conversation, indicated that he felt pressured to go along.)  The minutes of the meeting (again, which almost nobody knew about) were not posted in the town hall until AFTER the 30 day period for a legal appeal of the variance had passed.

Next, the site plan for the new oil and gas distribution center went to the Planning Board. The Planning Board held an extended public hearing that stretched over several evenings and several weeks. The professionals hired by the applicant offered a detailed site plan.  Strong concern was registered by nearby residents (who had not received any notice of the request for the zoning variance because the land owner kept a small strip of land between the proposed project (which was now in the the hands of the oil and gas company) and the neighbors. Thus, technically, they were not abutters. The way the Planning Board operates in this state, since it made up of citizen volunteers and has no professional staff of its own, is to rely on what the applicant submits.  When concerned citizens pointed out that even a small leak could spill across the road into the nearby brook and contaminate two of the lakes in the town, the applicant's engineer assured the Planning Board that the containment plan they had in mind wouldn't allow this to happen. When residents complained that
the whole facility was in violation of the town master plan (which clearly excludes heavy industry), the applicant's lawyer pointed out that the Zoning Board had granted them a variance. When residents raised concerns that the volunteer fire department did not have the necessary equipment or training to deal with a propane or fuel oil fire, the specialist hired by the applicant explained that their leak detection and containment system would head off any such problems.  The Planning Board didn't buy this, so the applicant offered to pay for new equipment and training for the local fire department. When other critics of the project pointed to sink holes that had already formed on the site (because so much of the soil was disturbed when the site was excavated and regraded), the applicant's engineers said they would put the tanks on concrete pads.  When still others pointed out that the site is in a seismically-active area and the pads (and tanks) might crack, the engineer said that they weren't required to make the facility earthquake-proof.

The town by-law only requires a drainage plan sufficient to deal with a 10 year flood. An engineer hired by concerned "abutters" said that a 100 year flood analysis would make more sense.  When citizens at the hearing pointed out that very large tanker trucks would be heading to the site at least three times a day and turning off a highway (with a 55 mile an hour speed limit and a passing lane coming from the other direction), the applicant said that they had already received approval from the state highway department. When neighbors asked for trees to hide the tanks from the highway, the project developer indicated, at first, that wouldn't be possible because the police and fire chiefs needed to be able to see the tanks from the road to ensure security. (They later backed off this claim and agreed to add a visual barrier.) When residents asked that the Planning Board require the site owner to carry insurance sufficient to cover any and all costs of accidents and leaks, the Planning Board claimed that it was not empowered to do this. The back-and-forth continued for many hours. Some residents had done their homework and discovered that the applicant had similar facilities at several other sites that had been the target of state and federal enforcement actions. The Planning Board ruled such comments out of order, claiming they were only entitled to look at the details of the site plan.  Eventually, the Planning Board was caught in the middle between friends of the applicant and angry opponents. The town Board of Selectmen indicated that there was nothing they could do because the project was in the hands of the Zoning Board and the Planning Board.

It took only a few weeks for a petition to the state Attorney General asking for an investigation to gain almost 300 signatures (about 1/3 of the adults in town). The Attorney General, though, will probably find that the Zoning Board followed the letter of law.  It seems the rules regarding public notice and recusal of officials are pretty vague. The Planning Board's final approval is likely to be tied up in court for the next several years. How is it possible for a Planning Board to protect the public health, safety and welfare (to say nothing of the ecosystems involved) if it has no independent environmental impact assessment or risk assessment to work from, even for one of the riskiest projects in the town's recent history? How can it be OK for a landowner to take his request for a project that is clearly barred by the town master plan (as well as by a plebiscite when the master plan was updated) to a Board that he heads? How is it possible for public notice requirements to permit no notice to nearby landowners and no posting of the minutes of a Board meeting within the period in which residents are allowed to appeal such a decision?

What's interesting is that signs have started to sprout all over town saying "No Tanks."  Residents in this libertarian state are looking to their local officials to "do something" about the threat posed by the project. Other commercial interests along the state road are worried that heavy industry in the commercial zone may pose risks to them and adversely affects the business climate. The state-wide daily newspaper has begun to cover the story, indicating that such manipulation of local boards is not in the best interests of the state. Even if the courts uphold both the Zoning and Planning Board decisions, residents won't forget what happened. I doubt the oil and gas distribution company will have very many local customers. In the end, even if the letter of the law is followed, but the spirt of the law and basic fairness to neighbors are violated, everybody loses.  Opponents will face ongoing and unnecessary risks (and loss of property values), while proponents will besmirch their good name, lose market share, set a troublesome precedent and face extended legal fees.

Better for local governments, even in a libertarian state, to set and follow clearer and more sensible ground rules. And then, everyone needs to abide by the process.   

Those Who Oppose Wind Energy

It can be difficult to win approval to build even a single wind turbine in an unpopulated area.

For the past three days, more than 100 wind developers, state regulators, environmentalists, local officials and technical experts met to discuss the right way and the wrong way to site wind energy facilities. With support from the Department of Energy, the Consensus Building Institute brought together advocates, opponents and experts to share their ideas and experiences. (You can read more about the event at www.cbuilding.org.)

Here are some pretty clear "do's" and "don'ts:"

Don't tell people that wind farms will be so quiet they won't hear anything.

Don't sneak up on people and announce plans to build something without giving everyone in the area a chance to say whether and how a project should be built.

Don't build wind turbines too close to the nearest abutters.

Don't let wind developers proceed without discussing how turbine operations might have to be restricted to reduce the risk to wildlife and the annoyance to neighbors.

Don't be afraid to talk about the ways in which the profits from a wind energy plant might be shared with the community.

Don't presume that 100% of the people in an area will go along with a proposed wind energy facility just because it meets all federal, state and local guidelines. Some people don't like change of any kind, regardless of the benefits that might be created.

Do find a way to involve all the relevant stakeholders in discussions about when, where and how to build and operate wind plants. (Make sure to use a skilled facilitator who doesn't have an axe to grind to manage these conversations.)

Do promise to compensate anyone who lives near a proposed facility for any decline in property values that might occur. (It is possible to buy "property value insurance" to make 100% sure that no one suffers any loss of property value.)

Do realize that everyone reacts differently to noise and visual impacts.

Do engage in joint fact finding so that all sides have a chance to frame the questions that need to be answered and select experts they trust to give them good technical advice. Avoid the dueling experts syndrome that is so common when cases go to court.

Do realize that hundreds of wind farms have been built across America (and in other parts of the world) and that past experience can be instructive.

Do realize that there are risks and benefits associated with any technology, and that the job of elected and appointed officials is to reduce risk and ensure that benefits are shared.

Do encourage states to involve the public in formulating state wind policies. Battles over specific sites and projects do not add up to general policies about where, when and how to encourage the construction of wind energy plants. Pre-approval of certain kinds of sites, set-back and noise requirements, aesthetic and environmental protection rules, community benefit agreements and monitoring provisions avoids the need to go through all these questions over and over again.

It's very clear that the traditional "town meeting" or "hearings" approach to energy facility siting is useless. Nobody learns anything at raucous public meetings. And, we can't count on local media to present information in an even-handed way. Newspapers, local television stations and talk radio exaggerate everything and reduce complicated questions to silly sound bites. They rarely have anyone with enough expertise to explain technical issues in a skillful fashion. Instead, communities must learn how to use the internet to encourage reasoned debate and non-partisan information sharing. Professionally facilitated stakeholder engagement (involving representatives chosen by the stakeholder groups themselves) can create a level playing field in which informal problem-solving is possible. This all has to be completely open and accountable.

The Facility Siting Credo (google it) summarizes the best way to ensure a fair, efficient and wise outcome in every single wind energy situation. It's not hard to do it right.

Overcoming the Not-In-My-Backyard (NIMBY) Syndrome

National Public Radio featured a story this week about growing opposition to renewable energy facilities, particularly wind power. Wind advocates were asked how they might overcome such local opposition -- dubbed the NIMBY syndrome -- in the future. The spokesperson said, "We've got to get in there earlier and educate people." Wrong! How arrogant! You think people are opposed because they don't understand? No, they're opposed because the "costs" and "impacts" ON THEM are likely to outweigh the likely benefits TO THEM. The only way to overcome the NIMBY syndrome, regardless of the type of facility, is to make sure that the overwhelming majority of people in the area believe that the benefits TO THEM if the facility is built will outweigh the costs and impacts THEY are likely to experience.

Why is this so hard to understand? Facility siting scholarship has been clear about this for almost thirty years. (See O'Hare, Bacow and Sanderson, Facility Siting and Public Opposition, Wiley, 1983.) More than twenty years ago, we figured out how to overcome the NIMBY Syndrome and crafted what we called The Facility Siting Credo (Lawrence Susskind, Negotiation Journal, Volume VI, Issue 4, October 1990, pp. 309-314) ). The Credo was tested nationally against the siting experience in a great many American cities (Howard Kunreuther, Kevin Fitzgerald, and Thomas Aarts, Risk Analysis, Volume 13, Number 3, 1993, pp. 301-318)

Every siting effort starts with a small percentage of people who favor whatever is being proposed, probably less than 10%. These are usually people likely to gain personally if the facility is built, maybe by selling their land directly to the facility developer). And, as Mike Elliott, a Professor at Georgia Tech demonstrated many years ago, an equally small percentage of people usually start out opposed. Typically, these are people likely to bear disproportionate costs -- because they live right next to whatever is being proposed. While there are some people in every community who pay no attention to anything (maybe 10%), the vast majority -- 60% - 65% -- fall into a category called "Guardians." It's what that this middle group does that leads to most facility siting controversies.

We know two things about Guardians (thanks to Professor Elliott). First, if they think a licensing or permitting decision is unfair, they will side with the opponents. And, second, they want to hear whatever the arguments are for and against a proposed facility "on their merits." If believable information isn't presented in an open forum where questions can be asked of experts and proponents in a problem-solving format, they will side with the opponents. NIMBYism occurs when these two facts about Guardians are ignored.

Let me get back to the wind energy spokesperson on NPR. If proponents put out one-sided information to help "sell" citizens on the need for new renewable energy facilities, or try to convince them that there won't be any adverse impacts, that's sure to backfire. The Facility Siting Credo indicates how to avoid these and other mistakes, but I'm just going to emphasize the three most important principles in the Credo (and that are, for the most part, ignored in most facility siting disputes in the United States because proponents are typically way overconfident).

1. Engage in joint fact finding, not one-sided "educational" efforts.

2. Let all the key stakeholders choose a mediator to help manage a consensus building process.

3. Promise to compensate potential "losers" and hold any adversely affected neighborhood harmless.

Most environmental impact assessments are prepared AFTER proponents have committed to build a facility. So, whatever data or forecasts are generated tend to be discounted by opponents as nothing but propaganda on behalf of decisions that have already been made. This is exactly the kind of thing that causes Guardians to side with the opponents. The Cape Wind Project in Massachusetts (the first off-shore wind farm in the United States) has been caught up in what must be the most elaborate regulatory review process in energy facility siting history in the United States. Whatever evidence has been presented by proponents has been countered by opponents. Everyone had made up their minds long before studies of the likely impacts of the facility became available. By the time the formal regulatory reviews took place, it was impossible to get all the parties in the same room for a civil conversation. Maine, however, has taken a different tack. The state has pre-reviewed all possible off-shore wind sites and noted publically those that seem to make the most sense in technical, economic and aesthetic terms. We'll see whether private companies proposing to build in one of these pre-designated and pre-reviewed areas faces the same opposition as Cape Wind. Joint fact finding regarding the likely benefits, impacts and costs of a proposed facility tends to be a lot easier if they take place before a specific site has been selected.

Most public involvement in government decisions in the United States is a joke. Hearings and so-called town meetings offer trivial opportunities for opponents and proponents to make short statements that won't convince anyone of anything. They are all for show. The real battle takes place in the media and behind the scenes as each group does its best to lobby the elected and appointed officials involved.

Only an extended public dialogue, when questions can still be asked and answered before the Guardians have taken sides, is likely to lead to believable analyses of the merits and demerits of each proposed technology, location, design, or mitigation strategy). We know how to do this, but it requires that some of the money that will inevitably be spent on lawyers and litigation be used to pay professional mediators to facilitate authentic problem-solving or consensus building efforts. This is not about public relations (which is what the wind spokesperson meant by "education"). Rather, it's about public learning through joint inquiry facilitated by a professional neutral. Most people don't even realize that such a thing is possible! Not everyone needs to be involved. Mediators know how to manage conflict assessments that can bring the right stakeholders to the table, to work on a jointly crafted agenda, with a range of experts advisors to help them. Such public inquiries can now be made entirely transparent on the web.

Now we get to the third principle at the heart of the Facility Siting Credo. Professor Howard Raiffa and others have written about this extensively. Unless you "hold potential losers harmless" they will oppose anything that is likely to hurt them. If you want to build a new facility in a particular location, there is no question that a small number of people living adjacent to the site will be opposed. Telling them that the "gains" to everyone else outweigh whatever "losses" they might experience -- so they should support the project -- is crazy. It's not rational. And, as Professor O'Hare noted years ago, it is easy for that small number of peole to find each other. And, they have a substantial incentive to try to block the facility. On the other hand, all the potential gainers (who could number in the millions if we are talking about switching from fossil fuels to clean energy) are usually unaware of the rather small gains they are might realize over the long haul. They don't have an incentive to organize themselves.

Iff the gains to the gainers far outweigh the losses to the losers, that's not going to stop the small number of potential losers from trying to block a facility. And, since regulators and public officials don't employ the Facility Siting Credo, they play into the hands of that small group who can easily recruit Guardians by complaining that decisions have been made without them and no one is doing anything to compensate the losers. Instead of 10% opposed, the opposition grows to more than 50%, and public officials have no choice but to fight the project.

Compensation to potential losers is not as tricky as it might seem. Most people haven't thought about the difference between compensation (something good) and a bribe (something bad). Also, compensation doesn't have to take the form of financial payments. A facility developer could promise to remove something that has for a long-time been a problem -- like cleaning up a contaminated site somewhere else in the area if they are allowed to go build their new facility.

A bribe is an illegal payment which people would be embarrassed to have made public. But compensation, awarded based on clear principles that ensure that everyone in the same category is treated equally, is not a bribe. Community benefit agreements (currently being debated in New York City) seek to ensure that everyone in a community will benefit when a new facility of some kind is built. Some of the gains to the gainers (especially proponents who stand to make a profit) are, in effect, taxed (before they go to the gainers) and used to ensure that the small number of opponents who really stand to lose will be made whole. Some gains are also used to compensate neighborhoods or communities who experience real losses so that everyone else in the city or region can benefit. Compensation payments, or compensatory measures to eliminate a problem in the area, ensure that all those who bear disproportionate costs (even small ones) realize some tangible benefit over and above the general benefits that all the gainers will get if a facility is built. Construction jobs, for example, ought to be held for those adversely affected. Property tax abatements (or at least property tax insurance) should be offered to those who live near a new facility. This will hold them harmless against any property value losses caused by the new facility. The key is to ensure that potential losers are fully compensated. This will lead the Guardians to side with the proponents and NIMBYism will melt away.

If there is no way to tax the gainers, and capture some of the benefits to compensate the losers, then the proposed facility is probably a mistake -- its either in the wrong location, using the wrong technology or being proposed at the wrong time.

Now, there are some opponents who just don't care what they are offered or what their neighborhood is offered (and, again, I'm not just talking about money). They oppose a new facility for ideological reasons or because they just don't want things to change. In real life, when the Facility Siting Credo is followed, the folks in this category (ideological opponents) are a very small minority (fewer than 5% of the total population of a community or region). Elected and appointed officials (and courts) who see that every effort has been made to use some gains to compensate losers and make the host community whole (through an open problem-solving conversation managed by a professional mediator) are not likely to block what 95% of the community supports. So, the trick is to get the Guardians to side with the proponents.

Please, no more whining about NIMBY. Just adopt the Facility Siting Credo and run the process the right way.