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Excerpts from FRANK HARTZELL’s article in the Mendocino Beacon, June 4, 2009

13298_DIA_0_opt picOcean Power Technologies’ subsidiary California Wave Energy Partners in it’s “wave energy project proposed off Cape Mendocino has surrendered its Federal Energy Regulatory Commission (FERC) preliminary permit, making two major companies that have abandoned the area in the past two weeks.

The moves come at a time when President Obama’s energy policy has cut funding for wave energy in favor of solar and wind energy development.

The withdrawals leave GreenWave Energy Solutions LLC, with a permit off Mendocino, as the only local wave energy project.

Pacific Gas and Electric Company announced earlier this month they would not seek to develop wave energy off Fort Bragg. However, PG&E has not yet legally abandoned its FERC preliminary permit.

California Wave Energy Partners did just that on May 26, telling FERC their parent company, Ocean Power Technologies (OPT) was pulling out of California in favor of developing wave energy more seriously in Oregon.

The project was proposed near Centerville off Humboldt County, south of Eureka on the remote coast of Cape Mendocino.

“OPT subsidiaries are also developing two other projects at Coos Bay and Reedsport,” wrote Herbert Nock of OPT. “During the process of developing these projects, OPT has learned the importance of community involvement in the project definition and permitting process.

“OPT therefore feels it is in the best interests of all parties to focus its efforts (in Oregon) at this time. This will allow the time and resources necessary to responsibly develop these sites for the benefit of the coastal community and the state,” Nock wrote.

The Cape Mendocino project was to be situated in a prime wave energy spot, but with connections to the power grid still to be determined. The project was never the subject of a public meeting in Mendocino County and stayed under the radar compared to several other Humboldt County projects. PG&E still plans to develop its WaveConnect project off Eureka.

Brandi Ehlers, a PG&E spokeswoman, said PG&E plans to relinquish the preliminary permit for the Mendocino Wave Connect project soon.

She said the utility spent $75,000 on the Mendocino County portion of Wave Connect before stopping because Noyo Harbor was ill-equipped to deal with an offshore energy plant.

“PG&E is not currently pursuing applications for new FERC hydrokinetic preliminary permits, but it is important that we continue to explore other possibilities,” Ehlers said in response to a question.

Secretary of the Interior Ken Salazar has announced that his department will host 12 public workshops this month to discuss the newly-issued regulatory program for renewable energy development on the U.S. Outer Continental Shelf.

All the meetings are to be held in large cities — in Seattle June 24, Portland on June 25, and San Francisco on June 26.

Salazar restarted the process of building a framework for energy development in the ocean, which had been started in the Bush Administration but never finished.

The new program establishes a process for granting leases, easements, and rights-of-way for offshore renewable energy projects as well as methods for sharing revenues generated from OCS renewable energy projects with adjacent coastal States. The rules for alternative energy development in the oceans become effective June 29.

Most of the actual ocean energy development figures are for the Atlantic and Gulf of Mexico. The Pacific Ocean’s near-shore slopes are too steep and too deep for current wind energy technology. Wave and tidal energy are still in their infancy, not seen as able to help with President Obama’s energy plan.

The Obama administration has proposed a 25% cut in the research and development budget for wave and tidal power, according to an in-depth report in the Tacoma, Wash., News Tribune.

At the same time the White House sought an 82% increase in solar power research funding, a 36% increase in wind power funding and a 14% increase in geothermal funding. But it looked to cut wave and tidal research funding from $40 million to $30 million, the News Tribune reported.

Interior’s Minerals Management Service, the agency charged with regulating renewable energy development on the Outer Continental Shelf [and specifically wind energy projects], is organizing and conducting the workshops, which will begin with a detailed presentation and then open the floor to a question and answer session. All workshops are open to the public and anyone interested in offshore renewable energy production is encouraged to participate.”

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MARK CLAYTON, The Christian Science Monitor, April 24, 2009

wave-ocean-blue-sea-water-white-foam-photoThree miles off the craggy, wave-crashing coastline near Humboldt Bay, California, deep ocean swells roll through a swath of ocean that is soon to be the site of the nation’s first major wave energy project.

Like other renewable energy technology, ocean energy generated by waves, tidal currents or steady offshore winds has been considered full of promise yet perennially years from reaching full-blown commercial development.

That’s still true – commercial-scale deployment is at least five years away. Yet there are fresh signs that ocean power is surging. And if all goes well, WaveConnect, the wave energy pilot project at Humboldt that’s being developed by Pacific Gas and Electric Co. (PG&E), could by next year deploy five commercial-scale wave systems, each putting 1 megawatt of ocean-generated power onto the electric grid.

At less than 1% of the capacity of a big coal-fired power plant, that might seem a pittance. Yet studies show that wave energy could one day produce enough power to supply 17% of California’s electric needs – and make a sizable dent in the state’s greenhouse gas emissions.

Nationwide, ocean power’s potential is far larger. Waves alone could produce 10,000 megawatts of power, about 6.5% of US electricity demand – or as much as produced by conventional hydropower dam generators, estimated the Electric Power Research Institute (EPRI), the research arm of the public utility industry based in Palo Alto, California, in 2007. All together, offshore wind, tidal power, and waves could meet 10% of US electricity needs.

That potential hasn’t gone unnoticed by the Obama administration. After years of jurisdictional bickering, the Federal Energy Regulatory Commission (FERC) and the Department of Interior — MMS last month moved to clarify permitting requirements that have long slowed ocean energy development.

While the Bush administration requested zero for its Department of Energy ocean power R&D budget a few years ago, the agency has reversed course and now plans to quadruple funding to $40 million in the next fiscal year.

If the WaveConnect pilot project succeeds, experts say that the Humboldt site, along with another off Mendocino County to the south, could expand to 80 megawatts. Success there could fling open the door to commercial-scale projects not only along California’s surf-pounding coast but prompt a bicoastal US wave power development surge.

“Even without much support, ocean power has proliferated in the last two to three years, with many more companies trying new and different technology,” says George Hagerman, an ocean energy researcher at the Virginia Tech Advanced Research Institute in Arlington, Va.

Wave and tidal current energy are today at about the same stage as land-based wind power was in the early 1980s, he says, but with “a lot more development just waiting to see that first commercial success.”

More than 50 companies worldwide and 17 US-based companies are now developing ocean power prototypes, an EPRI survey shows. As of last fall, FERC tallied 34 tidal power and nine wave power permits with another 20 tidal current, four wave energy, and three ocean current applications pending.

Some of those permits are held by Christopher Sauer’s company, Ocean Renewable Power of Portland, Maine, which expects to deploy an underwater tidal current generator in a channel near Eastport, Maine, later this year.

After testing a prototype since December 2007, Mr. Sauer is now ready to deploy a far more powerful series of turbines using “foils” – not unlike an airplane propeller – to efficiently convert water current that’s around six knots into as much as 100,000 watts of power. To do that requires a series of “stacked” turbines totaling 52 feet wide by 14 feet high.

“This is definitely not a tinkertoy,” Sauer says.

Tidal energy, as demonstrated by Verdant Power’s efforts in New York City’s East River, could one day provide the US with 3,000 megawatts of power, EPRI says. Yet a limited number of appropriate sites with fast current means that wave and offshore wind energy have the largest potential.

“Wave energy technology is still very much in emerging pre-commercial stage,” says Roger Bedard, ocean technology leader for EPRI. “But what we’re seeing with the PG&E WaveConnect is an important project that could have a significant impact.”

Funding is a problem. As with most renewable power, financing for ocean power has been becalmed by the nation’s financial crisis. Some 17 Wall Street finance companies that had funded renewables, including ocean power, are now down to about seven, says John Miller, director of the Marine Renewable Energy Center at the University of Massachusetts at Dartmouth.

Even so, entrepreneurs like Sauer aren’t close to giving up – and even believe that the funding tide may have turned. Private equity and the state of Maine provided funding at a critical time, he says.

“It’s really been a struggle, particularly since mid-September when Bear Sterns went down,” Sauers says. “We worked without pay for a while, but we made it through.”

Venture capitalists are not involved in ocean energy right now, he admits. Yet he does get his phone calls returned. “They’re not writing checks yet, but they’re talking more,” he says.

When they do start writing checks, it may be to propel devices such as the Pelamis and the PowerBuoy. Makers of those devices, and more than a dozen wave energy companies worldwide, will soon vie to be among five businesses selected to send their machines to the ocean off Humboldt.

One of the major challenges they will face is “survivability” in the face of towering winter waves. By that measure, one of the more successful generators – success defined by time at sea without breaking or sinking – is the Pelamis, a series of red metal cylinders connected by hinges and hydraulic pistons.

Looking a bit like a red bullet train, several of the units were until recently floating on the undulating sea surface off the coast of Portugal. The Pelamis coverts waves to electric power as hydraulic cylinders connecting its floating cylinders expand and contract thereby squeezing fluid through a power unit that extracts energy.

An evaluation of a Pelamis unit installed off the coast of Massachusetts a few years ago found that for $273 million, a wave farm with 206 of the devices could produce energy at a cost of about 13.4 cents a kilowatt hours. Such costs would drop sharply and be competitive with onshore wind energy if the industry settled on a technology and mass-produced it.

“Even with worst-case assumptions, the economics of wave energy compares favorably to wind energy,” the 2004 study conducted for EPRI found.

One US-based contestant for a WaveConnect slot is likely to be the PowerBuoy, a 135-five-foot-long steel cylinder made by Ocean Power Technology (OPT) of Pennington, N.J. Inside the cylinder that is suspended by a float, a pistonlike structure moves up and down with the bobbing of the waves. That drives a generator, sending up to 150 kilowatts of power to a cable on the ocean bottom. A dozen or more buoys tethered to the ocean floor make a power plant.

“Survivability” is a critical concern for all ocean power systems. Constant battering by waves has sunk more than one wave generator. But one of PowerBuoy’s main claims is that its 56-foot-long prototype unit operated continuously for two years before being pulled for inspection.

“The ability to ride out passing huge waves is a very important part of our system,” says Charles Dunleavy, OPT’s chief financial officer. “Right now, the industry is basically just trying to assimilate and deal with many different technologies as well as the cost of putting structures out there in the ocean.”

Beside survivability and economics, though, the critical question of impact on the environment remains.

“We think they’re benign,” EPRI’s Mr. Bedard says. “But we’ve never put large arrays of energy devices in the ocean before. If you make these things big enough, they would have a negative impact.”

Mr. Dunleavy is optimistic that OPT’s technology is “not efficient enough to rob coastlines and their ecosystems of needed waves. A formal evaluation found the company’s PowerBuoy installed near a Navy base in Hawaii as having “no significant impact,” he says.

Gauging the environmental impacts of various systems will be studied closely in the WaveConnect program, along with observations gathered from fishermen, surfers, and coastal-impact groups, says David Eisenhauer, a PG&E spokesman, says.

“There’s definitely good potential for this project,” says Mr. Eisenhauer. “It’s our responsibility to explore any renewable energy we can bring to our customers – but only if it can be done in an economically and environmentally feasible way.”

Offshore wind is getting a boost, too. On April 22, the Obama administration laid out new rules on offshore leases, royalty payments, and easement that are designed to pave the way for investors.

Offshore wind energy is a commercially ready technology, with 10,000 megawatts of wind energy already deployed off European shores. Studies have shown that the US has about 500,000 megawatts of potential offshore energy. Across 10 to 11 East Coast states, offshore wind could supply as much as 20% of the states’ electricity demand without the need for long transmission lines, Hagerman notes.

But development has lagged, thanks to political opposition and regulatory hurdles. So the US remains about five years behind Europe on wave and tidal and farther than that on offshore wind, Bedard says. “They have 10,000 megawatts of offshore wind and we have zero.”

While more costly than land-based wind power, new offshore wind projects have been shown in some studies to have a lower cost of energy than coal projects of the same size and closer to the cost of energy of a new natural-gas fired power plant, Hagerman says.

Offshore wind is the only ocean energy technology ready to be deployed in gigawatt quantities in the next decade, Bedard says. Beyond that, wave and tidal will play important roles.

For offshore wind developers, that means federal efforts to clarify the rules on developing ocean wind energy can’t come soon enough. Burt Hamner plans a hybrid approach to ocean energy – using platforms that produce 10% wave energy and 90% wind energy.

But Mr. Hamner’s dual-power system has run into a bureaucratic tangle – with the Minerals Management Service and FERC both wanting his company to meet widely divergent permit requirements, he says.

“What the public has to understand is that we are faced with a flat-out energy crisis,” Hamner says. “We have to change the regulatory system to develop a structure that’s realistic for what we’re doing.”

To be feasible, costs for offshore wind systems must come down. But even so, a big offshore wind farm with hundreds of turbines might cost $4 billion – while a larger coal-fired power plant is just as much and a nuclear power even more, he contends.

“There is no cheap solution,” Hamner says. “But if we’re successful, the prize could be a big one.”

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MendoCoastCurrent, April 23, 2009

images3In Octoberr 2008 Grays Harbor Ocean Energy applied for seven Federal Energy Regulatory Commission (FERC) preliminary permits for projects located in the Atlantic Ocean about 12 to 25 miles offshore off the coasts of New York, Massachusetts, and Rhode Island, and in the Pacific Ocean about 5 to 30 miles off the coasts of California and Hawaii.

On April 9, 2009 FERC and MMS signed a Memorandum of Understanding (MOU) clarifying jurisdictional responsibilities for renewable energy projects in offshore waters on the Outer Continental Shelf (OCS).  The stated goals of this MOU are to establish a cohesive, streamlined process, encouraging development of wind, solar, and ocean or wave energy projects.

In this MOU, FERC agrees to not issue preliminary permits for ocean or wave projects that are located on the Outer Continental Shelf. 

And as a result, on April 17, 2009 FERC dismissed all seven Grays Harbor’s pending preliminary permit applications for its proposed wave projects as each and every project is located on the OCS.

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H. JOSEF HEBERT, AP/StarTribune, April 22, 2009

dept_of_interior_seal

Washington D.C. — The Interior Department issued long-awaited regulations on April 22, 2009 governing offshore renewable energy projects that would tap wind, ocean currents and waves to produce electricity.

The framework establishes how leases will be issued and sets in place revenue sharing with nearby coastal states that will receive 27.5% of the royalties that will be generated from the electricity production.

Interior Secretary Ken Salazar said in an interview that applications are expected for dozens of proposed offshore wind projects, many off the north and central Atlantic in the coming months. “This will open the gates for them to move forward … It sets the rules of the road,” Salazer said.

Actual lease approvals will take longer.

Salazar said he expects the first electricity production from some of the offshore projects in two or three years, probably off the Atlantic Coast.

President Barack Obama, marking Earth Day during an appearances in Iowa, welcomed “the bold steps toward opening America’s oceans and new energy frontier.”

The offshore leasing rules for electricity production from wind, ocean currents and tidal waves had stalled for two years because of a jurisdictional dispute between the Interior Department and the Federal Energy Regulatory Commission over responsibility for ocean current projects.

That disagreement was resolved earlier this month in a memorandum of understanding signed by Salazar and FERC Chairman Jon Wellinghoff.

The department’s Minerals Management Service will control offshore wind and solar projects and issue leases and easements for wave and ocean current energy development. The energy regulatory agency will issue licenses for building and operating wave and ocean current projects.

Salazar repeatedly has championed the development of offshore wind turbine-generated energy, especially off the central Atlantic Coast where the potential for wind as an electricity source is believe to be huge.

He said he has had numerous requests from governors and senators from Atlantic Coastal states to move forward with offshore wind development. State are interested in not only the close availability of wind-generated electricity for the populous Northeast, but also the potential for additional state revenue.

“We expect there will be significant revenue that will be generated,” Salazar said.

Under the framework nearby coastal states would receive 27.5% and the federal government the rest.

Currently there is a proposal for a wind farm off Nantucket Sound, Mass., known as Cape Wind, which has been under review separately from the regulation announced Wednesday. The Interior Department said no decision has been made on the Cape Wind project, but if it is approved it will be subject to the terms of the new rules.

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COLIN SULLIVAN, The New York Times, April 14, 2009

wave-ocean-blue-sea-water-white-foam-photoPalo Alto — Technology for tapping ocean waves, tides and rivers for electricity is far from commercial viability and lagging well behind wind, solar and other fledgling power sectors, a panel of experts said last week during a forum here on climate change and marine ecosystems.

While the potential for marine energy is great, ocean wave and tidal energy projects are still winding their way through an early research and development phase, these experts said.

“It’s basically not commercially financeable yet,” said Edwin Feo, a partner at Milbank, Tweed, Hadley & McCloy, during a conference at Stanford University. “They are still a long ways from getting access to the capital and being deployed, because they are simply immature technologies.”

Ocean and tidal energy are renewable sources that can be used to meet California’s renewable portfolio standard of 10 percent of electricity by 2010. But the industry has been hampered by uncertainty about environmental effects, poor economics, jurisdictional tieups and scattered progress for a handful of entrepreneurs.

Finavera Renewables, based in British Columbia, recently canceled all of its wave projects, bringing to a close what was the first permit for wave power from the Federal Energy Regulatory Commission. And last fall, the California Public Utilities Commission (CPUC) denied Pacific Gas & Electric Co.’s application for a power purchase agreement with Finavera Renewables, citing the technology’s immaturity.

Roger Bedard, head of the Electric Power Research Institute’s wave power research unit, said the United States is at least five and maybe 10 years away from the first commercial project in marine waters. A buoy at a Marine Corps base in Hawaii is the only wave-powered device that has been connected to the power grid so far in the United States. The first pilot tidal project, in New York’s East River, took five years to get a permit from FERC.

Feo, who handles renewable energy project financing at his law firm, says more than 80 ocean, tidal and river technologies are being tested by start-ups that do not have much access to capital or guarantee of long-term access to their resource. That has translated into little interest from the investment community.

“Most of these companies are start-ups,” Feo said. “From a project perspective, that doesn’t work. People who put money into projects expect long-term returns.”

William Douros of the National Oceanic and Atmospheric Administration (NOAA) expressed similar concerns and said agency officials have been trying to sort through early jurisdictional disputes and the development of some technologies that would “take up a lot of space on the sea floor.”

“You would think offshore wave energy projects are a given,” Douros said. “And yet, from our perspective, from within our agency, there are still a lot of questions.”

‘Really exciting times’

But the belief in marine energy is there in some quarters, prompting the Interior Department to clear up jurisdictional disputes with FERC for projects outside 3 miles from state waters. Under an agreement announced last week, Interior will issue leases for offshore wave and current energy development, while FREC will license the projects.

The agreement gives Interior’s Minerals Management Service exclusive jurisdiction over the production, transportation or transmission of energy from offshore wind and solar projects. MMS and FERC will share responsibilities for hydrokinetic projects, such as wave, tidal and ocean current.

Maurice Hill, who works on the leasing program at MMS, said the agency is developing “a comprehensive approach” to offshore energy development. Interior Secretary Ken Salazar himself has been holding regional meetings and will visit San Francisco this week to talk shop as part of that process.

Hill said MMS and the U.S. Geological Survey will issue a report within 45 days on potential development and then go public with its leasing program.

“These next couple of months are really exciting times, especially on the OCS,” he said.

Still, Hill acknowledged that the industry is in an early stage and said federal officials are approaching environmental effects especially with caution.

“We don’t know how they’ll work,” he said. “We’re testing at this stage.”

‘Highly energetic’ West Coast waves

But if projects do lurch forward, the Electric Power Research Institute’s Bedard said, the resource potential is off the charts. He believes it is possible to have 10 gigawatts of ocean wave energy online by 2025, and 3 gigawatts of river and ocean energy up in the same time frame.

The potential is greatest on the West Coast, Bedard said, where “highly energetic” waves pound the long coastline over thousands of miles. Alaska and California have the most to gain, he said, with Oregon, Washington and Hawaii not far behind.

To Feo, a key concern is the length of time MMS chooses to issue leases to developers. He said the typical MMS conditional lease time of two, three or five years won’t work for ocean wave technology because entrepreneurs need longer-term commitments to build projects and show investors the industry is here to say.

“It just won’t work” at two, three or five years, Feo said. “Sooner or later, you have to get beyond pilot projects.”

Hill refused to answer questions about the length of the leases being considered by MMS.

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Cherry Creek News Staff, March 17, 2009

WASHINGTON, DC – In a joint statement issued today Secretary of the Interior (DOI), Ken Salazar and Acting Chairman of the Federal Energy Regulatory Commission (FERC) Jon Wellinghoff announced that the two agencies have confirmed their intent to work together to facilitate the permitting of renewable energy in offshore waters.

“Our renewable energy is too important for bureaucratic turf battles to slow down our progress. I am proud that we have reached an agreement with the Federal Energy Regulatory Commission regarding our respective roles in approving offshore renewable energy projects. This agreement will help sweep aside red tape so that our country can capture the great power of wave, tidal, wind and solar power off our coasts,” Secretary Salazar said.

“FERC is pleased to be working with the Department of the Interior and Secretary Salazar on a procedure that will help get renewable energy projects off the drawing board and onto the Outer Continental Shelf,” Acting FERC Chairman Jon Wellinghoff said.

Below is the joint Statement between DOI and FERC signed by Secretary Salazar and Acting Chairmain Wellinghoff:

JOINT STATEMENT BY THE SECRETARY OF THE INTERIOR AND THE ACTING CHAIRMAN OF THE FEDERAL ENERGY REGULATORY COMMISSION ON THE DEVELOPMENT OF RENEWABLE ENERGY RESOURCES ON THE OUTER CONTINENTAL SHELF

The United States has significant renewable energy resources in offshore waters, including wind energy, solar energy, and wave and ocean current energy.

Under the Outer Continental Shelf Lands Act, the Secretary of the Interior, acting through the Minerals Management Service, has the authority to grant leases, easements, and rights-of-way on the outer continental shelf for the development of oil and gas resources. The Energy Policy Act of 2005 amended the Outer Continental Shelf Lands Act to provide the Interior Department with parallel permitting authority with regard to the production, transportation, or transmission of energy from additional sources of energy on the outer continental shelf, including renewable energy sources.

The Interior Department’s responsibility for the permitting and development of renewable energy resources on the outer continental shelf is broad. In particular, the Department of the Interior has permitting and development authority over wind power projects that use offshore resources beyond state waters.

Interior’s authority does not diminish existing responsibilities that other agencies have with regard to the outer continental shelf. In that regard, under the Federal Power Act, the Federal Energy Regulatory Commission has the statutory responsibility to oversee the development of hydropower resources in navigable waters of the United States. “Hydrokinetic” power potentially can be developed offshore through new technologies that seek to convert wave, tidal and ocean current energy to electricity. FERC will have the primary responsibility to manage the licensing of such projects in offshore waters pursuant to the Federal Power Act, using procedures developed for hydropower licenses, and with the active involvement of relevant federal land and resource agencies, including the Department of the Interior.

We have requested our staffs to prepare a short Memorandum of Understanding that sets forth these principles, and which describes the process by which permits and licenses related to renewable energy resources in offshore waters will be developed.

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EVAN LEHMANN, The New York Times, March 17, 2009

The oceans might not be big enough for sharp-elbowed renewable energy developers. Aspiring power producers are claiming sweeping stretches of sea along the East Coast, sometimes overlapping each other and igniting modern-day allegations of “claim jumping.”

Open water miles from shore is the newest frontier for prospectors, as vague notions persist about who in the federal government presides over the ocean depths. A jurisdictional dispute between two federal agencies — the Department of Interior’s Minerals Management Service and the Federal Energy Regulatory Commission — is encouraging a “Wild West” atmosphere, as one participant described the accelerating race to grab chunks of seafloor for energy development.

The impasse has led competing prospectors to claim the same areas of ocean off New Jersey’s coast, citing authority from different federal agencies. Wind developers are accusing Seattle-based Grays Harbor Ocean Energy Co. of taking advantage of the regulatory uncertainty to snatch a 200-square-mile swath of ocean for a proposed wave and wind energy project through FERC.

Smaller patches within that area had already been identified for wind farms approved by the state and been given a preliminary green light by MMS.

“They are all around us,” Chris Wissemann, founder of Deepwater Wind, said of Grays Harbor. State regulators awarded development rights to Deepwater Wind last fall to build a 350-megawatt wind farm about 20 miles off the shore with PSEG Renewable Generation.

But now the Grays Harbor site is “completely overlapping” the smaller 20-square-mile area of ocean identified by Deepwater Wind, Wissemann added, noting that his project is at “full stop.” The sprawling Grays Harbor parcel also encompasses a second wind project, proposed by Bluewater Wind, which plans to erect about 100 turbines over 24 square miles.

Wind developers and state officials are pressing FERC to deny Grays Harbor’s permit. A decision could come this spring.

‘Wild West’ goes to sea

The confusion is the offspring of dueling federal agencies. The Minerals Management Service is generally considered the landlord of the ocean floor, and has been working for three years on new rules to provide leases for wind farms on the outer continental shelf. There is no dispute about its authority over wind projects, as outlined in the Energy Policy Act of 2005.

But the Federal Energy Regulatory Commission has been arguing for two years that it maintains jurisdiction over hydrokinetic projects — those that tap the power of waves and currents — under the Federal Power Act.

That leaves developers of both wind and wave technologies vulnerable to each other. Preliminary permits are easy to get, and that can lead to “a lot of gamesmanship” in areas known to have good energy prospects, said Carolyn Elefant, a lawyer with the Ocean Renewable Energy Coalition.

“There are a lot of people who have these visions of flipping sites, selling sites, jumping claims and making people buy them off,” she said. “It’s the Wild West.”

That “back and forth” struggle between the two agencies stalled the release of MMS’s new rule on offshore renewable energy projects at the close of George W. Bush’s presidency, according to Michael Olsen, a former deputy assistant secretary in the Interior Department, who worked on the rule. Developers say the delay has prevented the offshore industry from growing.

“There was a tremendous push at the end of the last administration” to finalize the rule, Olsen said an event sponsored by the Energy Bar Association yesterday. “And it was delayed because of this dispute.”

‘Permit flippers’ vs. ‘mafiosos’

Grays Harbor is at the center of that storm. Run by Burton Hamner, who has experience in coastal management, the company in October plunged into the race to build the first offshore power generation project on the East Coast.

It applied for six interim leases from FERC, a move that would give it priority over hundreds of square miles off the coasts of Massachusetts, New Jersey, Rhode Island and several other states. The move could essentially secure those areas for three years, sidelining other wind companies that had already gone through a competitive selection process with the state of New Jersey and that are now waiting on the MMS rule before moving forward.

“I could literally have my equipment on a boat and receive a letter from FERC saying, ‘You have no right to do this because we have a competing set of regs,'” said Wissemann of Deepwater Wind, which might wait to build a data-collecting test tower until the dispute is settled.

A group of nine U.S. lawmakers, mostly from the East Coast, assailed Grays Harbor’s move — without mentioning the company — as “claim jumping” in a letter last week to Interior Secretary Ken Salazar. Some wind developers are furious, saying Hamner is “site banking” stretches of ocean with an eye toward trading in real estate, not clean energy.

“They’re looking to flip the permits,” said one official with a wind developer.

But Hamner dismisses those accusations as if they’re insults from entitled lawmakers or bested competitors acting like bossy “New Jersey mafiosos.”

Salazar pushing for a fix

He describes his maneuvering as a good business decision, one that fits within existing rules. He is not a claim jumper, he says, because MMS has not issued the rule needed to receive leases — an assertion with which his competitors have no choice but to agree.

“You can’t say somebody else is claim jumping when you haven’t in fact made a claim,” Hamner said. “All they’re doing is sitting there on the shore saying, ‘Hey, we were here first. What’s this guy doing messin’ in our sandbox?'”

He is unapologetic about applying for interim permits under FERC, days after the commission underscored its jurisdiction over hydrokinetic (wave power) projects in October. Nor does he feel burdened by exploiting the turf battle in Washington. FERC, he says, is the rightful overseer of electricity projects.

“They could have done the same thing that I did,” Hamner said of other developers. “The ocean’s got a lot of opportunity. There’s room for everybody. What we don’t want to have is people standing on the shore who’ve got the attitude of New Jersey mafiosos saying that’s their playground.”

Hamner is eligible for a FERC permit because he’s emphasizing wave power. At each of his seven sites, he proposes raising 100 platforms, each with three legs. Every leg will carry a 330-kilowatt generator, providing about 10% of the 1,100 megawatts produced by each project. Hamner plans to find the bulk of his electricity through wind turbines, big, 10-megawatt units on each platform.

The territorial dispute, meanwhile, is rising to a new level of urgency in Washington. Salazar said he hopes to draft a long-delayed memorandum of understanding with FERC, perhaps as soon as today. That could prevent the agencies from “stumbling over each other,” he told reporters on a conference call yesterday.

“We will not let any of the jurisdictional turf battles in the past get in the way with moving forward with our energy agenda,” Salazar said.

The MMS rule regarding leases could follow soon if the inter-agency dispute is settled. That’s considered a key requirement for sparking a robust offshore industry.

“They just need to work it out,” said Laurie Jodziewicz, manager of siting policy for the American Wind Energy Association. “We have some real projects that are being held up right now.”

Yet Olsen, the former official with Interior who worked on the rule, expressed doubt yesterday that Salazar would be able to quickly disarm the two sides. Congress might have to draft new legislation, he predicted, or perhaps President Obama’s new energy czar, Carol Browner, could muscle a jurisdictional remedy into place.

“It’s going to be the same thing,” Olsen said, recalling past challenges to fixing the problem. “Something’s gotta happen.”

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