Excerpts from FRANK HARTZELL’s article at the Mendocino Beacon, September 4, 2008
PG&E decided last week not to be the national test case for the Minerals Management Service’s wave energy program.
Just two weeks earlier, the utility officially filed paperwork to pursue those same far offshore wave energy leases. None of the filings have yet been provided to this newspaper by PG&E, or presented to the public locally.
Why such a quick change of mind?
“In early August we said yes to enter into negotiations for the (MMS) Mendocino project,” said PG&E spokeswoman Jana Morris. “Within the following three weeks we hoped there would be change to the economic and commercial terms of the interim lease, which did not occur.
“At that point we made the decision to stop negotiations until the final rules are made available,” said Morris.
Minerals Management Service officials did not respond to questions about what they will do next, now that their test case is gone.
The Minerals Management Service (MMS) believes it must charge private companies and promote competition for leases of public resources — which the competing Federal Energy Regulatory Commission gives to the first company in line at no direct cost.
After no competing firms emerged by the May 19 deadline, the MMS abandoned the idea of competitive bidding and proposed charging $3 per acre annually to lease the areas.
“PG&E has concluded that the project costs, including the significant rental fees, of going forward under an interim lease are unacceptably high, particularly in light of the absence of any competitive advantage at the commercial leasing stage,” said Morris.
Recent Offshore Development Timeline
- April — MMS releases its interim alternative energy application process. The MMS picks one site for each kind of energy proposed to be generated on the Outer Continental Shelf, wave, current, tide and wind. PG&E’s twin projects in Fort Bragg and Eureka are the wave energy choice.
- May — When no other developer applies for the 200 square miles of ocean that PG&E has claimed off Eureka and Fort Bragg, the MMS proposes a $3 per acre annual fee.
- August 1 — MMS announces a new initiative to open more areas to offshore oil drilling. Email and regular mail public comments are being taken through Sept. 5 on what areas should be opened.
- August 6 — PG&E officially applies for the new MMS leases at $3 per acre.
- August 15 — MMS holds a seminar in San Francisco to explain the new alternative energy process. PG&E attends.
- August 26 — Mendocino County moves ahead with suing the Federal Energy Regulatory Commission, or FERC, over its wave energy process.
- August 26 — PG&E reverses its position of August 6 and announces it won’t pursue the interim leases, instead waiting until MMS finishes its rulemaking process later in 2008 or early 2009.
- August 29 — PG&E files a six-month progress report with FERC. The company claims a large amount of local outreach in the report, naming numerous public meetings it has held. The company has revealed little or no new information at any of those meetings. The status report also mentions the company collaborated with two universities in June on filing a request with the U.S. Department of Energy.
- August 31 — California State Senate passes a joint resolution asking Congress to renew the federal waters Outer Continental Shelf offshore drilling moratorium. This resolution, AJR 51, authored by Assemblyman Pedro Nava, had been passed by the California State Assembly earlier this summer.
- September and October — Congress must pass new annual moratorium for protections off the Mendocino Coast and much of the East and West Coasts to continue. Republicans nationally make creating new drilling wherever possible a key campaign issue. A rival GOP plan would open up only certain Eastern states and new areas in the Gulf of Mexico to drilling.