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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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H. JOSEF HEBERT, The Associated Press, March 16, 2009

While the Obama administration has touted offshore renewable energy development, a turf fight between two federal agencies has stymied the government’s ability to issue rules needed to approve wind energy projects off America’s coasts.

Interior Secretary Ken Salazar said Monday the infighting has got to stop.

“It will be resolved,” Salazar said in response to questions about the dispute. “We will not let any of the jurisdictional turf battles of the past get in the way of our moving forward with the renewable energy agenda.”

The dispute, which dates to late 2007, pits the Interior Department against the Federal Energy Regulatory Commission over which entity should approve projects that use coastal waves and currents to produce power.

Offshore wind development has been entangled in the dispute because Interior’s Mineral Management Service does not want to separate wind projects from the tidal wave, or hydrokinetic power, programs – which FERC in turn has refused to surrender, according to several officials who have followed the dispute.

Interior and FERC are said to be close to agreement on a “memorandum of understanding” that would delineate each organization’s involvement in the offshore renewable energy approval process.

Salazar has been vocal in his call for more aggressive development of renewable energy projects off the country’s coasts, especially off the northern and central Atlantic. He said the governors of New Jersey and Delaware have asked what is holding up the regulations and said projects off their coasts are ready to go.

Jon Wellinghoff, acting chairman of FERC, played down the interagency dispute and – like Salazar – said he was confident the problem will soon be worked out.

“It’s less of a dispute than people say it is,” insisted Wellinghoff in a brief interview, adding that he doubted it has stopped any wind projects.

“It has nothing to do with wind. It only has to do with our jurisdiction over hydrokinetic systems, whether they are on the Outer Continental Shelf or not,” said Wellinghoff. He said he saw no reason why the Mineral Management Service would insist on viewing the tidal wave and wind issues together.

Salazar over the past week met with Wellinghoff to try to work out a memorandum of understanding that could be issued as early as this week. Both men are expected to be asked about the disagreement at a Senate Energy and Natural Resources Committee hearing Tuesday.

“If we don’t resolve the jurisdictional issues between FERC and the Department of Interior, we are not going to be able to move forward in the development of our offshore renewable energy resources,” said Salazar.

Mike Olsen, an attorney who represents Deep Water Wind, a company that wants to build a 96-turbine wind farm off the New Jersey coast, calls the dispute a classic government turf battle.

“It’s two agencies both feeling each has specific authority and jurisdiction. Neither one wants to yield its authority or jurisdiction to the other,” said Olsen, who as a deputy assistant Interior secretary in the Bush administration observed the dispute first hand.

Interior waged “a full court press” to get the rules on offshore renewable energy development finalize last year, Olsen said, but the effort was thwarted by the lack of an agreement with FERC.

“From our perspective the rule was ready to go in November,” said Olsen. But despite involvement of the Bush White House, no memorandum of understanding on the jurisdiction issue could be hammered out between Interior and FERC.

With a new administration on the horizon “the battle was put on hold,” he said.

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MendoCoastCurrent, March 11, 2009

17transition2-6001Secretary of the Interior Ken Salazar announced today that he has just signed his first order establishing renewable energy generation as the top priority of the Department of the Interior. Following President Obama’s lead in steering the United States into this new energy path, he said this agenda would create jobs and grow investment and innovation at home. Also noted was that the DOI will focus mostly in western states for generation of electricity through renewable energy (solar, wind, wave, geothermal, biomass).

Secretary Salazar illustrated this opportunity with the Bureau of Land Management backlog over 200 solar energy projects and over 20 wind projects in western states alone. There have yet been any permits or jobs created for these renewable energy projects to be fast-tracked in consideration, evaluated in terms of environmental impact and anticipating the acceptable projects will move forward swiftly.

Starting today, renewable energy projects in solar, wind, small hydro, geothermal and biomass will benefit in priority treatment to generate electricity and renewable energy. And Secretary Salazar stated that a newly-formed energy and climate change task force is already working hard, nights and weekend to develop these plans (since January 20th) for presentation to a Dept. of Energy committee soon. 

In tandem, Secretary Salazar indicated that through cross-departmental effort (BLM, EPA, Dept. of Energy, MMS, FERC and others), his goal is to rapidly and responsibly move forward with Obama’s renewable energy agenda to develop and upgrade the United States electric transmission grid.  

When asked about Cape Wind off Cape Cod, Mr. Salazar indicate that “after we hold our hearings around the country [for MMS rulemaking] the jurisdictional issues between the Federal Energy Regulatory Commission and Minerals Management Service shall be accomplished within this year.” Many projects are being inhibited and we are actively clearing the path to move forward.

The roadshow planned by Secretary Salazar shall help identify renewable energy zones (solar energy in western states minus ecological sensitivity (reduction). He explained that today, through solar energy in the western states alone, we may produce 88% of all of the energy needs and adding wind takes it over 100%. This also fuels the need for a national transmission system as a high priority.

Salazar also called for the need to finalize and renew offshore renewable energy rules that protect the United States landscapes, wildlife and environment as we serve as steward of our lands.

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wave-ocean-blue-sea-water-white-foam-photoMendoCoastCurrent, February 14, 2009

Acting Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff recently published Facilitating Hydrokinetic Energy Development Through Regulatory Innovation

Consider it required reading as a backgrounder on US wave energy policy development, FERC’s position on the MMS in renewables and FERC’s perceived role as a government agency in renewable energy, specifically marine energy, development.

Missing from this key document are the environmental and socio-economic-geographic elements and the related approval process and regulations for:

  • environmental exposure, noting pre/during/post impact studies and mitigation elements at each and every marine energy location;
  • socio-economic factors at each and every marine location (including a community plan with local/state/federal levels of participation).

Approaching the marine renewable energy frontier with a gestalt view toward technology, policy and environmental concerns is a recommended path for safe exploration and development of new renewable energy solutions.  

It has been FERC’s position that energy regulatory measures and policies must precede before serious launch of US projects and other documents by Wellinghoff have noted a six month lead time for policy development alone.

MendoCoastCurrent sees all elements fast-tracked in tandem.  Environmental studies/impact statements are gathered as communities gear up to support the project(s) while technology and funding partners consider siting with best practices and cost-efficient deployment of safe marine energy generation.  All of these elements happen concurrently while FERC, DOI/MMS, DOE local and state governments explore, structure and build our required, new paradigm for safe and harmonious ocean energy policies.

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Washington Post Editorial, February 12, 2009

Interior Secretary Salazar Keeps his Options Open on Offshore Drilling 

17transition2-6001Here’s the ultimate midnight regulation: On the very last day of the Bush administration, the Interior Department proposed a new five-year plan for oil and gas leasing on the outer continental shelf. All hearings and other meetings on the scope of the plan, which would have opened as much as 300 million acres of seafloor to drilling, were to be completed by March 23, 2009. On Tuesday, Ken Salazar, President Obama’s interior secretary, pushed back the clock 180 days, imposing order on a messy process.

Mr. Bush’s midnight maneuver would have auctioned oil and gas leases without regard to how they fit into a larger strategy for energy independence. More can be done on the shelf than punching for pools of oil to satisfy the inane “drill, baby, drill” mantra that masqueraded as Republican energy policy last summer.

Mr. Salazar’s 180-day extension of the comment period is the first of four actions that he says will give him “sound information” on which to base a new offshore plan for the five years starting in 2012. He has directed the Minerals Management Service and the U.S. Geological Survey to round up all the information they have about offshore resources within 45 days. This will help the department determine where seismic tests should be conducted. Some of the data on the Atlantic are more than 30 years old.

The secretary will then conduct four regional meetings within 30 days of receiving that report to hear testimony on how best to proceed. Mr. Salazar has committed to issuing a final rule on offshore renewable energy resources “in the next few months.” Developing plans to harness wind, wave and tidal energy offshore would make for a more balanced approach to energy independence. It would also have the advantage of complying with the law. Mr. Salazar helped to write a 2005 statute mandating that Interior issue regulations within nine months to guide the development of those offshore renewable energy sources [the Energy Policy Act of 2005], a requirement that the Bush administration ignored.

Mr. Salazar’s announcement was also notable for what it didn’t do. Much to the chagrin of some environmental advocates, it didn’t take offshore drilling off the table. Nor did it cut oil and gas interests out of the discussion.

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DANIEL B. WOOD, The Christian Science Monitor, February 11, 2009

Less than a month into his administration, President Obama is making good on campaign promises to move toward a comprehensive approach to US energy and to broaden environmental protections. The administration has moved over the past few weeks to undo many of Bush’s last-minute drilling and environmental decisions, including putting the brakes Tuesday on a plan to open up vast new areas off the Atlantic and Pacific coasts to offshore drilling.

In swift succession, the Obama administration has:

  • Ordered the Environmental Protection Authority to reconsider its decision to deny California permission to set standards controlling greenhouse-gas emissions from motor vehicles – if permitted, this would allow 13 more states to follow suit.
  • Abandoned a Bush administration legal appeal in a major air pollution case – signaling it will allow tougher rules to cut mercury emissions from power plants.
  • Canceled 77 Bush-era oil and gas leases over 100,000 acres of public land near national parks in Utah.
  • Announced an intent to develop an offshore energy plan that includes renewable resources, giving states and the federal government more time to study and assess the future of offshore energy planning.

“There’s clearly a new kid in town. The Obama administration is moving quicker on the environment than anything else,” says Robert Stern, president of the Center for Governmental Studies. “They are concerned that untoward things are going to happen before they can get new policies in place, so they are trying to reverse old ones.”

In the most recent move to stall Bush policy, Interior Secretary Ken Salazar announced Tuesday that the time period for public comment on a draft five-year plan for offshore oil and gas leasing would be extended for another 180 days. He also ordered the US Geological Survey and the Minerals Management Service to develop an extensive profile of the nation’s resources offshore.

The plan, which was proposed by the Bush administration on its last day in office and published the day after President Obama took office, originally allowed 45 days for scoping and comment.

Describing the plan as “a headlong rush of the worst kind,” Mr. Salazar said that “Bush’s “midnight action” accelerated by two years the regular process for creating a new plan for the outer continental shelf.

“It opened up the possibility for oil and gas leasing along the entire Eastern Seaboard, portions of offshore California, and the far eastern Gulf of Mexico, with almost no consideration of state, industry, and community input and … with very limited information about the nature of offshore resources,” he said.

The new administration will look at offshore drilling as part of a comprehensive energy plan, he said. The changes are to “fulfill President Obama’s commitment to a government that is open and inclusive and makes decisions based on sound science and the public interest.”

“I intend to do what the Bush administration refused to do; build a framework for offshore renewable-energy development so that we incorporate the great potential for wind, wave, and ocean current energy into our offshore energy strategy.”

In a similar move last week, the Interior secretary announced that the Bureau of Land Management would withdraw drilling leases that were offered on 77 parcels of US public land near national parks in Utah. The leases, on land totaling 103, 225 acres, are under litigation in district court.

Development of oil and gas supplies was needed to help reduce dependence on foreign oil, but it must be done in a “thoughtful and balanced way that allows us to protect our signature landscapes and culture resources,” said Salazar, adding that the BLM would return $6 million in bids from an auction last December.

Also last week, the Justice Department said it is withdrawing a US Supreme Court appeal filed by the Bush administration against a court ruling governing mercury emissions from coal- and oil-fired power plants.

The Obama administration has also told the EPA to reconsider denying California the power to regulate vehicular pollution. The Bush administration’s EPA in 2007 had denied California the waiver needed to authorize its special status under the Clean Air Act. That law gives California the authority to regulate vehicular pollution because the state began doing so before the federal government did.

Leading environmental groups, which were often at odds with Bush, are breathing a palpable sigh of relief. “We are encouraged by Obama’s announcement that he is going to restore order to a broken system and that is what this is,” says Kristina Johnson, deputy press secretary for the Sierra Club.

“This five-year offshore drilling program that Bush tried to push through wasn’t based on sound science, and there was no public input,” she said. “It’s part of a new way of doing business. [The Obama administration understands] that the answer to America’s energy problems isn’t more drilling and that we need to be investing in clean energy.”

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Publisher’s Note:  Feb 09, 2009 – Not only has Finavera surrendered their Makah Bay license noted below, they also announced surrendering the Humboldt County, California Preliminary Permit to explore wave energy:

“Finavera Renewables has filed applications to surrender its Federal Energy Regulatory Commission license for the Makah Bay Wave Energy Pilot Project in Washington and the Humboldt County Preliminary Permit for a proposed wave energy project in California.”

MendoCoastCurrent readers may recall Finavera’s inability to secure CPUC funding for the Humboldt project; noted below capitalization, financial climate as key reasons in these actions.

MendoCoastCurrent, February 6, 2009

finavera-wavepark-graphicToday Finavera Renewables surrendered their Federal Energy Regulatory Commission (FERC) Makah Bay, Washington wave energy project license, commenting that the Makah Bay Finavera project “never emerged from the planning stages.”

And “due to the current economic climate and the restrictions on capital necessary to continue development of this early-stage experimental Project, the Project has become uneconomic.  Efforts by Finavera to transfer the license were not successful.  Therefore, Finavera respectfully requests that the <FERC> Commission allow it to surrender its license for the Project. ”

Back in early 2007, Finavera’s Makah Bay project looked like it would become the first U.S. and west coast project deployment of wave energy devices.  And this project also had a unique status based on Native American Indian land/coastal waters, so the rules of FERC, MMS were different due to sovereign status.

Then AquaBuoy, Finavera’s premier wave energy device, sank off the Oregon coast due to a bilge pump failure in late October 2007.  

Recently noted was Finavera’s comment that they are currently focusing their renewable energy efforts toward wind energy projects closer to their homebase in British Columbia, Canada and in Ireland.

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SUSAN CHAMBERS, The World, February 3, 2009

Coos Bay — The announcement came as a surprise to everyone.

beachpThe Federal Energy Regulatory Commission’s Thursday order issuing a preliminary permit for a 200- to 400-buoy wave energy project off of Newport shocked Ocean Power Technologies leaders as well as the public.

“It’s a project, a site that is not on our priority list right now,” OPT spokesman Len Bergstein said. “It was a little bit of a surprise to us in terms of timing.”

What’s different about this project is that FERC’s approval stirs up a hornet’s nest at the time OPT is trying to work with residents on the South Coast for community approval of two sites: a 10-buoy project off of Gardiner and a 200-buoy project off of the North Spit.

It also calls into question FERC’s intentions of adhering to a memorandum of understanding previously negotiated with Oregon to give the state greater siting power over wave energy projects in the territorial sea.

The approval also seems to be designed for FERC to flex authority over territory traditionally overseen by the U.S. Department of Interior’s Minerals Management Service. Both agencies have claimed the area outside of Oregon’s territorial sea, beyond three nautical miles.

Mixed Messages

As the FERC notice of approval hit residents’ e-mail inboxes late Thursday, outrage began to build.

“My concern is this sends the wrong message,” said Lincoln County District Attorney Rob Bovett. “This is high-value crab grounds, about as valuable as you get.”

OPT applied for the permit in November 2006, but let the application slide. The jurisdictional battle meant the application was going nowhere fast. OPT decided to concentrate its work on the Gardiner and Coos Bay sites, both of which are inside the territorial sea.

Bergstein said as soon as he found out about the approval, he immediately called Lincoln County Commissioner Terry Thompson and other Lincoln County folks, particularly those involved with the Fishermen Involved in Natural Energy group.

“Clearly, we have not been prompting FERC,” Bergstein said.

Bovett, who was involved in the commenting on the original OPT application, said Fishermen Involved has been working with wave energy companies to determine the best sites for development that would have the least impact on the fishing industry and local communities. This, though, was different.

“FINE wasn’t involved in the selection of this box,” Bovett said.

State vs. FERC?

Bovett’s first question was: Does the memorandum of understanding not mean anything?

In March 2008, FERC and Oregon signed a memorandum designed to “coordinate the procedures and schedules for review of wave energy projects.”

Bovett just chuckled.  According to the deal, he said, FERC wasn’t going to issue permits willy nilly. 

Some of the discrepancy over the decision to issue a preliminary permit — which allows OPT to only study the area for feasibility — may be because Oregon hasn’t finished updating its territorial sea plan. The Ocean Policy Advisory Council and the state have been working on it, but the marine reserves issue has dominated the council’s time over the past year.

“This will obviously get everybody’s attention,” Southern Oregon Ocean Resource Coalition Chairman Nick Furman said of FERC’s decision.

That’s putting it lightly.

Whereas the Reedsport and Coos Bay sites are considered by some to be ground zero as far as local communities negotiating with wave energy developers, the Newport site could be ground zero for state vs. federal and agency vs. agency jurisdiction and siting battles.

However, Bovett said, OPT holds the key right now.

The New Jersey-based wave energy developer should withdraw from  the site, he said. Otherwise, years of litigation seem likely — and courts ultimately would have the final say over which agency should be in charge of alternative energy.

“OPT can fix this,” Bovett said. “It’s exactly what they should do.”

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STEPHEN POWER, The Wall Street Journal, January 28, 2009
images1Interior Secretary Ken Salazar indicated Tuesday that the Obama Administration could be open to expanded offshore drilling and is considering doing away with a controversial program that allows oil companies to pay in kind for oil and natural gas taken from public lands.

Salazar inherited a Bush Administration plan that would open tracts off the Atlantic and Pacific coasts where drilling had previously been prohibited. Environmental groups want the Obama administration to re-impose a ban on expanded offshore drilling that President George W. Bush lifted last year.

Asked in an interview with The Wall Street Journal whether President Barack Obama might try to reinstate the ban, Salazar paused 18 seconds before saying: “I don’t know.”

“We have significant drilling already in many places of the Gulf coast. We have drilling in many places off the Alaska shorelines. There are other places that hold potential for exploration. We’ll develop our guidelines as to how we’re going to look at it. But we’re still at the beginning of an information-gathering process,” he said.

Asked about the Bush administration’s proposal to open certain areas of the Atlantic and Pacific coasts to drilling and whether he saw any opportunities for expanded development of the nation’s offshore areas, Salazar said: “When you look at the whole [outer continental shelf], it’s a huge potential. And it has to be done carefully. We don’t want to ruin the beaches of Florida and the coastlines of other places that are sensitive.”

“On the other hand, there are places where it may be appropriate for us to have reconnaissance and exploration and even development. Those are questions that we are exploring and hopefully over the months ahead we’ll have answers to these questions,” he said.

Salazar left the door open to curtailing the “royalty-in-kind” program, under which the government receives oil or natural gas instead of cash for payments of royalties from companies that lease federal property for oil and gas development, and then sells the product into the marketplace and returns the proceeds to the Treasury. “We’re going to put everything on the table — I think everything needs to be looked at,” Salazar said.

Meanwhile, Salazar said new legislation may be needed to overhaul the scandal-plagued Minerals Management Service, a bureau of Interior that manages the nation’s offshore oil and natural gas reserves.

Salazar said his top priority is to restore confidence in the agency, and in particular the MMS, which was rocked last fall by a report from the department’s inspector general that accused some MMS employees of accepting gifts from and having sex with oil and gas industry representatives whose activities they were supposed to regulate.

Although the Bush administration late last year announced disciplinary action ranging from warnings to termination of more than a half-dozen workers implicated in the report, Salazar said he is mulling “whether additional actions are required.”

Many environmental groups are looking to Salazar to reverse certain policy changes made in the final months of the Bush administration, including new regulations on commercial oil-shale development that the groups say lock in inappropriately low royalty rates for energy firms. Salazar said he and his aides intend to review “all those issues” and that “I expect that there will be changes.”

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Let Your Voice Be Heard by March 23, 2009

by MendoCoastCurrent and pointarenabasin

Beginning January 22, 2009 and ending on March 23, 2009, a 60-day Public Comment Period opened regarding new offshore oil and gas exploration and drilling in the pristine waters off northern California.

And while this is a multi-step process and before things are cast in stone, NOW is the time to share your views.

FROM THE FEDERAL REGISTER – REQUEST FOR PUBLIC COMMENTS

DEPARTMENT OF THE INTERIOR – Minerals Management Service

Request for Comments on the Draft Proposed 5-Year Outer Continental Shelf (OCS) Oil and Gas Leasing Program for 2010-2015 and Notice of Intent To Prepare an Environmental Impact Statement (EIS) for the Proposed 5-Year Program

AGENCY: Minerals Management Service, Interior.

ACTION: Request for Comments.

SUMMARY: The Minerals Management Service (MMS) requests comments on the Draft Proposed 5-year OCS Oil and Gas Leasing Program for 2010-2015 (DPP). This draft proposal is for a new oil and gas program to succeed the current program that is currently set to expire on June 30, 2012, and forms the basis for conducting the studies and analyses the Secretary will consider in making future decisions on what areas of the OCS to include in the program.

DATES: Please submit comments and information to the MMS no later than March 23, 2009.

LINK:  Federal eRulemaking Portal: http://www.regulations.gov. Under the tab “More Search Options,” click “Advanced Docket Search,” then select “Minerals Management Service” from the agency drop-down menu, then click the submit button. In the Docket ID column, select MMS-2008-OMM-0045 to submit public comments and to view related materials available for this Notice.

Mail or hand-carry comments to the Department of the Interior; Minerals Management Service; Attention: Leasing Division (LD); 381 Elden Street, MS-4010; Herndon, Virginia 20170-4817. Please reference “2010-2015 Oil and Gas Leasing in the Outer Continental Shelf,” in your comments and include your name and return address.

Summary of the Draft Proposed Program

In developing the DPP for 2010-2015, the MMS considered oil and gas leasing in the areas of the OCS that are included in the current 5-year program for 2007-2012 and additional areas off Alaska, Pacific coast, the Gulf of Mexico, and Atlantic coast. Some of these additional areas had been subject to annual congressional moratoria prohibiting oil and gas leasing. However, the moratoria expired on September 30, 2008. The DPP includes lease sales in offshore areas that have the highest oil and gas resource values and highest industry interest.

It has been promoted that 47 comments from oil and gas companies or associations nominated specific planning areas to be included in the new 5-Year program; some nominated all planning area.  

Wave energy reporter Frank Hartzell claims that the nominations may have been fabricated, see In Last Days, Bush Inflicts North Coast Offshore Oil Plan.

Table A–Draft Proposed Program for 2010-2015–Lease Sale Schedule

———————————————————————

Sale Number Area Year

———————————————————————

236…………………… Northern California………..2014

Pacific Region

The Pacific Region consists of 4 planning areas–Washington-Oregon, Northern California, Central California, and Southern California. The DPP schedules one sale in the Northern California Planning Area and two in the Southern California Planning Area. The proposed sales are in areas of known hydrocarbon potential – the Point Arena Basin in Northern California.

Environmental Impact Statement (EIS) Preparation

Pursuant to section 102(2)(C) of NEPA, the MMS intends to prepare an EIS for the new 5-year OCS oil and gas leasing program for 2010-2015. This notice starts the formal scoping process for the EIS under 40 CFR 1501.7, and solicits information regarding issues and alternatives that should be evaluated in the EIS. The EIS will analyzethe potential impacts of the adoption of the proposed 5-year program.

The comments that MMS has received in response to the August 2008, Request for Comments, and the comments received during scoping for the 2007-2012 5-Year EIS have identified environmental issues and concerns that MMS will consider in the EIS. In summary, these include climate change as an impact factor in cumulative analyses, the effects of the OCS program on climate change, potential impacts from accidental oil spills, potential impacts to tourism and recreation activities, and ecological impacts from potential degradation of marine and coastal habitats. Additionally alternatives will be developed and analyzed during the EIS process based on scoping comments and governmental communications. Alternatives may include increasing or decreasing the number or frequency of sales, coastal buffers, limiting areas available for leasing, and excluding parts of or entire planning areas.

Scoping Meetings

Meetings will be held between now and March 23, 2009 to receive scoping comments on the EIS including –

Ft. Bragg/Ukiah, California; TBA

Next Steps in the Process

The MMS plans to issue the proposed program and draft EIS in mid-summer 2009 for a 90-day comment period and plans to issue the proposed final program and final EIS in spring 2010. The Secretary of the Interior may approve the new 5-year program 60 days later to go into effect as of July 1, 2010.

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JANE KAY, San Francisco Chronicle, January 17, 2009

ba-drilling0117__sfcg1232159552_part1The U.S. Interior Department, acting in President Bush’s final days in office, proposed on Friday opening up 130 million acres off of California’s coast to drilling for oil and natural gas, including areas off Humboldt and Mendocino counties and from San Luis Obispo south to San Diego.

After a hands-off policy for a quarter-century, the administration submitted plans to sell oil and gas leases for most of the U.S. coast, from the Gulf of Maine to Chesapeake Bay and the Outer Banks of North Carolina to the Gulf of Mexico and the Pacific Coast.

New drilling also was proposed in Alaska’s Bristol Bay, one of the nation’s most plentiful sources of fish, and the Arctic Ocean.

Washington, Oregon and protected parts of Florida were excluded along with waters off San Francisco Bay that lie within national marine sanctuaries.

On Friday, the American Petroleum Institute, the U.S. Chamber of Commerce and other business groups greeted the news with praise, saying it is time for domestic energy supplies to be released from the moratorium.

But environmental groups and some Democratic leaders who oppose California drilling criticized the 11th-hour move, vowing to work with the Obama administration to promote energy independence based on clean, renewable technologies.

“President Bush’s last-ditch effort to open our coasts to new drilling is nothing more than a parting gift to his buddies in the oil and gas industry,” said Lois Capps, D-Santa Barbara, a member of the House Natural Resources Committee.

On the eve of the 40th anniversary of the platform blowout that spilled 3 million gallons of black crude oil on 35 miles of beaches around Santa Barbara, Capps said, “New offshore drilling would not lower gas prices, make us more energy independent or get our economy back on track.”

Richard Charter, a longtime environmental lobbyist who now works for the Defenders of Wildlife Action Fund, called the government’s move “an extremist act.”

“What we see today is the political equivalent of a rock star trashing the hotel room right before checkout,” he said.

The Interior Department used a lapse in the congressional moratorium in October and a cancellation of a presidential prohibition in July to set in motion the lease-sale program – which the incoming administration of President-elect Barack Obama could cancel or proceed with.

Obama has said he would consider some offshore oil drilling as part of a comprehensive energy plan. Sen. Ken Salazar, D-Colo., Obama’s pick for interior secretary, hasn’t given his views on offshore drilling in California. He said in his confirmation hearings Thursday that he will confer with the administration’s team.

Gov. Arnold Schwarzenegger, along with the governors of Oregon and Washington, opposes new offshore oil drilling despite the new revenue it would offer the cash-strapped state.

The federal government has failed to make a case for a new program because energy resources are insignificant in the Atlantic, Pacific and eastern Gulf of Mexico, already-sold leases aren’t being used, and no protections are in place to protect the environment, the governors said.

In Friday’s announcement, Interior Department officials proposed three new lease sales, one in Northern California and two in Southern California in “areas with known hydrocarbon potential.” The proposals, which were based on requests from seven oil companies that weren’t named, would include:

— As many as 44 million acres of federal waters, which start 3 miles from the shoreline, off Humboldt and Mendocino counties.

— As many as 89 million acres off of San Luis Obispo, Santa Barbara, Ventura, Los Angeles, Riverside and San Diego counties. One lease would require equipment operating at a diagonal to drill within the Santa Barbara Ecological Preserve. In Southern California, there are 79 existing leases with 43 producing and 36 undeveloped.

There will be a 60-day comment period, with hearings in Ukiah, Fort Bragg, Santa Barbara, Ventura and San Diego. Dates for the hearings have not been announced.

If sales are allowed, they could occur as soon as 2014.

About 60%  of California citizens who commented on new oil-and-gas development were opposed to new drilling, according to the Interior Department’s oil-drilling agency, the Minerals Management Service.

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MICHAEL FALCONE, The New York Times, January 16, 2009

On January 15, 2009, Senator Ken Salazar pledged to “clean up the mess” at the Interior Department if he is confirmed as the next chief of the department, which has been plagued by ethics scandals.

Mr. Salazar, Democrat of Colorado, also said he shared President Obama’s commitment to ending the country’s dependence on foreign oil, a goal that he said could be achieved, in part, through greater use of renewable resources like solar and wind power.

But he avoided specifics when members of the Senate Committee on Energy and National Resources, who are considering his confirmation, pressed him on whether he supported an expansion of oil extraction from public lands and offshore drilling. 

On the question of whether to open more areas off the coasts to oil exploration, Mr. Salazar said there might be some areas where it would be appropriate and “other places that are off limits.”

The full Senate voted Thursday to set aside two million acres in nine states as protected wilderness. Approval is expected in the House.

Mr. Salazar, who was a farmer and rancher before he entered public life, also promised that on his watch the agency, which has jurisdiction over vast expanses of federal lands, would not be focused solely on the western half of the United States.

“I want this department to be America’s department,” he said.

Mr. Salazar also fielded questions on a variety of other topics, including the Endangered Species Act and changes at the Bureau of Indian Affairs. 

He kept his answers short, and often vague, but appeared to breeze through the hearing before a committee of his legislative colleagues.

Senator Ron Wyden,  Democrat of Oregon, said that it had turned into a “full-fledged bouquet-tossing contest.”

But Mr. Wyden warned Mr. Salazar that he had some “very heavy lifting ahead,” and sought assurances that he would review some decisions made by Bush administration officials to see if they were politically tainted.

Mr. Salazar said, “We will review what decisions have been made to see whether there is action necessary to make sure that they’re in compliance with the law and to make sure they’re in compliance with the science.”

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FRANK HARTZELL’s article with MendoCoastCurrent edits, January 15, 2009

After nearly two years of local pleas for specifics on the WaveConnect project, PG&E representatives surprised Fort Bragg and Mendocino County representatives with many new details.

Those included the promise by PG&E that all environmental studies would be public, not private information. In the recent past, PG&E had been resisting calls by competitors and ratepayer advocates before the California Public Utilities Commission to make public more information learned during the WaveConnect study.

Another surprise was that PG&E has found about 10 different viable wave energy technologies — far more than first envisioned. The utility will choose the top three or four wave energy devices and test those under a pilot project license.

On Tuesday, the pilot license process became the biggest issue for wave energy officials gathered at Town Hall to hear two top officials explain the roles of the Federal Energy Regulatory Commission, or FERC, and the California Coastal Commission.

Both Tom Luster, who will oversee all wave energy projects for the California Coastal Commission and 23-year FERC veteran Ann Miles, FERC Director of Hydropower Licensing said Fort Bragg has had more interest in wave energy than anywhere else in California.

Miles said PG&E would need to file for a conventional license by this March under FERC rules. Using the “faster” pilot license gives them until March 2010 to get started.

Miles provided lengthy and knowledgeable explanations of convoluted FERC processes during the three-hour meeting. But PG&E’s new announcements, which came in private meetings last week, overshadowed the presentations by the top state and federal officials.

Luster explained how the California Coastal Commission would work with the State Lands Commission to review any wave energy project within three miles of shore.

PG&E is now saying their 40-megawatt powerplant will be located “well beyond” that three-mile state limit. The powerplant would likely come after the five-year pilot project license.

That announcement unexpectedly changed the game for the state.

Luster said the big power cable that extends to shore would be regulated by the Coastal Commission, but development beyond three miles would be regulated only for “federal consistency.”

While planning for an eventual project many miles from shore, PG&E will give up on areas more than three miles from shore for now, they have told FERC.

PG&E told Fort Bragg they would site the pilot project much closer to shore, to avoid the jurisdictional conflict between FERC and fellow federal agency Minerals Management Service, or MMS.

FERC claims the authority to be the regulatory authority for all water energy projects in the United States. MMS claims authority for ocean federal waters, which are those more than three miles from shore.

PG&E’s 68-square-mile preliminary permit area, which runs from Point Cabrillo to Cleone and to more than three miles offshore, will be trimmed down to eliminate areas beyond the federal-state jurisdiction line.

PG&E representatives are now promising significant help to local governments.

It was reported that all of the power generated by the 40 megawatt WaveConnect would be consumed in Mendocino County and would provide for nearly all of Fort Bragg’s electric demand when WaveConnect is generating.

Additionally, PG&E intends to pay their expenses, including reviewing, permitting and the community process for public participation.

Miles said FERC has no requirements in place to determine that a developer be able to pay for removal of devices in case of bankruptcy or disaster.

Luster said the State Lands Commission handles financial arrangements, such as bonding of projects.

Miles was making her first ever visit to Northern California. She was set to answer questions from the general public at a Town Hall forum Tuesday night.

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MendoCoastCurrent, January 8, 2009

obama-hope1Key President-elect Barack Obama renewable energy quotes from his January 8, 2009 speech to the U.S. Congress and citizens, on his top economic priorities as he takes office.

“. . .the first question that each of us asks isn’t ‘what’s good for me?’ but ‘what’s good for the country my children will inherit?”

On creating new jobs and investing in America’s future:

“This plan must begin today. A plan I’m confident will save and create at least three million jobs over the next few years.”

The American Recovery & Reinvestment Program:

“It’s not just a public works program. It’s a plan that recognizes both the paradox and promise of the moment. The fact that there are millions of Americans trying to find work, even as all around the country there’s so much work to be done and that’s why we’ll invest in priorities like energy and education, healthcare and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. That’s why the overwhelming majority of the jobs created will be in the private sector while our plan will save public sector jobs . . .”

“To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills.”

“In the process, we will put Americans to work in jobs that pay well and cannot be outsourced. Jobs building solar panels and wind turbines, constructing fuel efficient cars and buildings, and developing the new energy technologies that will lead to even more jobs, more savings and a cleaner, safer planet in the bargain.”

“The time has come to build a 21st century economy in which hard work and responsibility are once again rewarded.”

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DAVID EHRLICH, Earth2Tech/GigaOm, December 23, 2008

environmental_defenseOcean energy could have a big part to play under President-elect Barack Obama’s environmentally friendly administration, but a coalition that’s pushing for more wave and tidal power says change is needed to expand the number of projects in the U.S. Right now, there are only a handful of ocean energy projects in the U.S. and they’re all in the testing phase, according to the coalition.

The group, which is led by the New York-based Environmental Defense Fund, a non-profit environmental advocacy organization, said it has met with Obama’s transition team to discuss what it says is a confusing, and sometimes contradictory, array of federal regulations for ocean power. It claims that with federal help, ocean energy has the potential to generate 10% of the country’s demand for electricity, as well as create tens of thousands of jobs in the U.S.

Earlier this month, Obama named four key members to his cabinet that will be responsible for energy and climate change, including Steven Chu as energy secretary.

One big conflict the new cabinet may have to deal with is a jurisdictional dispute between the Federal Energy Regulatory Commission and the Minerals Management Service, part of the Dept. of the Interior. Both agencies have claims on the waters where ocean energy projects would be installed.

Part of the Energy Policy Act of 2005 gave the Minerals Management Service the power to issue leases for renewable energy projects in the outer continental shelf a zone of federally owned seabeds outside of state waters, which the coalition said typically covers an area from 3-200 nautical miles offshore.

But that new law didn’t eliminate any preexisting federal authority in the area, and the FERC has said it has the authority to license wave and tidal projects in U.S. territorial waters covering an area within 12 nautical miles of the shore.

According to the coalition, despite negotiations between the two agencies, they’ve been unable to reach an agreement on the overlapping claims. The group said that the continued uncertainty from that conflict is making it harder to lock down financing for ocean energy projects in the States.

The coalition is made up of local governments, utilities, environmental groups and ocean power companies, including Pennington, N.J.-based Ocean Power Technologies, which recently inked a deal to develop wave power projects off the coasts of Australia and New Zealand.

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JANE KAY, The San Francisco Chronicle, December 29, 2008

ba-drilling1229__sfcg1230351957The federal government is taking steps that may open California’s fabled coast to oil drilling in as few as three years, an action that could place dozens of platforms off the Sonoma, Mendocino and Humboldt coasts, and raises the specter of spills, air pollution and increased ship traffic into San Francisco Bay.

Millions of acres of oil deposits, mapped in the 1980s when then-Interior Secretary James Watt and Energy Secretary Donald Hodel pushed for California exploration, lie a few miles from the forested North Coast and near the mouth of the Russian River, as well as off Malibu, Santa Monica and La Jolla in Southern California.

“These are the targets,” said Richard Charter, a lobbyist for the Defenders of Wildlife Action Fund who worked for three decades to win congressional bans on offshore drilling. “You couldn’t design a better formula to create adverse impacts on California’s coastal-dependent economy.”

The bans that protected both of the nation’s coasts beginning in 1981, from California to the Pacific Northwest to the Atlantic Coast and the Straits of Florida, ended this year when Congress let the moratorium lapse.

President-elect Barack Obama hasn’t said whether he would overturn President Bush’s lifting last summer of the ban on drilling, as gas prices reached a historic high. Sen. Ken Salazar, D-Col., Obama’s pick as interior secretary and head of the nation’s ocean-drilling agency, hasn’t said what he would do in coastal waters.

The Interior Department has moved to open some or all federal waters, which begin 3 miles from shore and are outside state control, for exploration as early as 2010. Rigs could go up in 2012.

National marine sanctuaries off San Francisco and Monterey bays are off-limits in California. Areas open to drilling extend from Bodega Bay north to the Oregon border and from Morro Bay south to the U.S.-Mexico border.

Drilling foes say the impacts of explosive blasts from seismic air guns that map rock formations, increased vessel traffic and oil spills should be enough to persuade federal agencies to thwart petroleum exploration. California’s treasured coast, with its migrating whales, millions of seabirds, sea otters, fish and crab feeding grounds, beaches and tidal waters, are at risk, Charter and other opponents say.

According to the Interior Department, coastal areas nationwide that were affected by the drilling ban contain 18 billion barrels of oil and 76 trillion cubic feet of natural gas in what the agency called yet-to-be-discovered fields. The estimates are conservative and are based on seismic surveys in the late 1970s and early 1980s, before the moratorium went into effect.

California’s Share

The agency’s last estimate puts about 10 billion barrels in California, enough to supply the nation for 17 months. That breaks down to 2.1 billion barrels from Point Arena in Mendocino County to the Oregon border, 2.3 billion from Point Arena south to San Luis Obispo County and 5.6 billion between there and Mexico.

“If you were allowed to go out and do new exploration, those numbers could go up or down. In most cases, you would expect them to go up,” said Dave Smith, deputy communications officer of the Interior Department’s Minerals Management Service, which oversees energy development in federal waters.

In California, any exploration and drilling would be close to shore, experts say. In contrast to the Gulf of Mexico, where drilling could occur in waters 10,000 feet deep, California’s holdings lie on its narrow, shallow continental shelf, the underwater edge of land where creatures died over the millennia to produce the oil.

If the Interior Department decides to explore off California’s coast, it could probably do so, some attorneys say. If a state objects to a lease plan, the president has the final say.

Once an area has been leased, the California Coastal Commission may review an oil company’s plan to explore or extract resources to assess if it is consistent with the state’s coastal management program. Conflicts can end up in court, said Alison Dettmer, the commission’s deputy director.

Californians have generally opposed drilling since a platform blowout in 1969 splashed 3 million gallons of black, gooey crude oil on 35 miles of beaches around Santa Barbara, killing otters and seabirds. The destruction of shoreline and wildlife sparked activism and led to the creation of the Coastal Commission.

But when gas prices peaked a few months ago amid cries of “drill, baby, drill” at rallies for GOP presidential candidate John McCain and running mate Sarah Palin, 51 percent of Californians said they favored more offshore drilling, according to a survey by the Public Policy Institute of California.

In July, Interior Secretary Dirk Kempthorne jump-started the development of a new oil and natural gas leasing program and pushed up possible new coastal activity by two years.

The Interior Department is reviewing comments about which coastal areas to include in the next five-year leasing plan. Oil companies want all of the nation’s coastal areas open and say they can produce oil offshore in a way that protects the environment. Gov. Arnold Schwarzenegger, who opposes new offshore development, has offered comments, as have environmental groups.

Obama’s Energy Plans

Obama’s administration and Congress will have the final say over which regions, if any, would be put up for possible lease sales. In Congress earlier this year, Salazar, Obama’s nominee for interior secretary, supported a bipartisan bill allowing exploration and production 50 miles out from the southern Atlantic coast with state approval. The bill died.

“We’ve been encouraged that the president-elect has chosen Sen. Salazar,” said Dan Naatz, vice president for federal resources with the Independent Petroleum Association of America, a group with 5,000 members that drill 90% of the oil and natural gas wells in the United States. “He’s from the West, and he understands federal land policy, which is really key.”

During this year’s presidential campaign, Obama was bombarded by questions about high gas prices and said new domestic drilling wouldn’t do much to lower gasoline prices but could have a place in a comprehensive energy program.

After introducing his green team of environment and energy chiefs recently, Obama said the foundation of the nation’s energy independence lies in the “power of wind and solar, in new crops and new technologies, in the innovation of our scientists and entrepreneurs and the dedication and skill of our workforce.”

He spoke of moving “beyond our oil addiction,” creating “a new, hybrid economy” and investing in “renewable energy that will give life to new businesses and industries.”

Obama didn’t mention oil drilling. When a reporter asked him if he would reinstate the moratorium, he said he wasn’t happy that the moratorium was allowed to lapse in Congress without a broader thought to how the country was going to reduce dependence on fossil fuels.

He reiterated his campaign position that he was open to the idea of offshore drilling if it was part of a comprehensive package, adding that he would turn over the question to his team.

In the 1970s and 1980s, before the moratorium on offshore drilling fully took effect, the federal government produced a series of maps showing areas in California of prospective interest to the oil industry. Those maps offer clues to where oil companies would bid if they had the opportunity.

North Coast

The last proposed lease sale in 1987, thwarted by the moratorium, would have opened 6.5 million acres off the North Coast. Off Mendocino and Humboldt counties, the tracts for sale lay from 3 to 27 miles offshore, and some of the 24 planned platforms, some of them 300 feet tall and each with dozens of wells, would have been visible from land.

Tourism and commercial fisheries would have been affected, according to an environmental review then, while as many as 240 new oil tanker trips from Fort Bragg and Eureka to San Francisco Bay refineries were predicted under the full development scenario. The probability of one or more spills occurring would be 94 percent for accidents involving 1,000 barrels or more, according to documents.

Rep. Lois Capps, D-Santa Barbara, a member of the House Natural Resources Committee, recently said oil drilling will be part of a comprehensive energy policy focusing on renewable sources, but she would like to see drilling occur only on land and in the Gulf of Mexico where infrastructure is in place.

Capps well remembers the Santa Barbara spill almost 40 years ago.

“I was living in Goleta. I just had two children, and my husband was a young professor at UC Santa Barbara. It was a devastating experience,” she said. “The birds and other animals got trapped in the oil. So many people waded out in boots just inch by inch trying to rescue our wildlife. It ruined our tourism for many years.

“I think about it all the time, especially last week when we had had a spill at the same platform. It was a small spill, 1,000 gallons, but it was a wake-up call.”

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Excerpts from article by FRANK HARTZELL, The Mendocino Beacon, December 24, 2008

On January 13, 2009, from 5-7p.m. at Fort Bragg Town Hall, a “top official from the Federal Energy Regulatory Commission (FERC) will appear to explain the agency’s strategy on developing what it calls “hydrokinetic” power as an alterative energy source.

Ann F. Miles, FERC’s director of the Division of Hydropower Licensing, will meet with county and city officials before attending the public meeting in Fort Bragg.

“The FISH Committee is looking forward to FERC’s visit, and welcomes the opportunity to learn about the different FERC licensing processes for wave energy, and how fishermen and other affected people can participate and have their voices heard,” said attorney Elizabeth Mitchell, who represents the Fisherman Involved for Safe Hydrokinetics.

Ocean waters off the Mendocino Coast, from Little River to Cleone, are now claimed under exclusive study permits by two different wave energy developers. GreenWave LLC claims 17 square miles of waters from Little River to Point Cabrillo, while PG&E claims 68 square miles from Point Cabrillo to Cleone.

Preliminary permits granted by FERC give not only exclusive study rights to the claimants, but also licensing priority to develop wave energy upon successful completion of the three-year studies.

Fort Bragg has become ground-zero for wave energy regulation. The federal Minerals Management Service, which is involved in an open feud with FERC over wave energy regulation, has sought to make Fort Bragg its test case.

FERC drew local ire by denying local efforts to intervene in the study process. At one point, protesters carried signs targeting the obscure federal agency with messages such as “Don’t FERC with us.”

One FERC insider said commissioners had complained that more fuss had been made in tiny Fort Bragg than the entire rest of the nation.

FERC later relented and on appeal granted intervener status to Mendocino County, for the PG&E project. The period to intervene and comment on GreenWave’s permit closes Friday, Feb. 6. As yet, nobody has filed anything with FERC, according to its Website.

“The commission’s existing procedures are well-established and well-suited to address this expansion of conventional hydropower with new technologies,” Miles told Congress last year, “and we are prepared to learn from experience in this rapidly evolving area and to make whatever regulatory adjustments are appropriate in order to help realize the potential of this renewable energy resource.”

FERC expanded its domain into all tidal, wave, river flow and ocean current study and licensing with its novel concept of a unified “hydrokinetic” regulation.

From the Yukon River in Alaska to the ocean currents off the Florida Keys, FERC has grown its regulatory territory dramatically since the start of the Bush administration. The agency is now explaining how dam regulation and wave energy innovation can go together. FERC recently granted the first hydrokinetic plant permit for production of energy in the Mississippi River in the state of Minnesota.

The independent agency has moved quickly with Neo-Con era disdain for regulation, eschewing calls from fellow federal and state agencies for a conventional rulemaking process. Instead FERC has adjusted its process as it goes along.

In her presentation to Congress, Miles focused on wave energy, not the more prevalent river current energy plans. She said wave energy projects will likely occur close to shore, not far out in federal waters.

“The cumulative costs of development … make it advantageous to locate projects nearer to the shore,” Miles told Congress.

Locals have complained that FERC has no intelligible process for public input. Governments and critics of FERC have been frustrated in efforts to get details.

FERC is a uniquely independent federal agency. It is under the Department of Energy but does not report to DOE, a structure that was created during the Great Depression. The president appoints FERC commissioners.

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JOHN DRISCOLL, The Times-Standard, December 15, 2008

A white paper commissioned by the state of California says that tapping the ocean for power should be done carefully.

The report for the California Energy Commission and the Ocean Protection Council looked at the possible socio-economic and environmental effects of the infant industry, including what it might mean for fisheries and coastal habitat.

It also made recommendations on what research should be done to address those potential effects.

The waters remain murky in regard to what type of technology wave energy projects might use, and the scope of necessary development. The study finds that it will be key to fill in that missing information to determine what impacts they might have.

“Site selection and project scale are critical factors in anticipating these potential effects,” the report reads.

Depending on their size and location, the study reads, commercial and sport fisheries might be impacted, but new projects would yield construction and operations jobs for nearby communities.

But projects could also interfere with wave shoaling and beach building by stripping some energy out of waves, and that in turn could affect species from the high tide line out to the continental shelf.

The buoys or other structures designed to convert wave power to electricity are also likely to act like artificial reefs where reef-related fish would congregate, the report reads, a change from what would typically occur in the open ocean.

Birds and marine mammals may also be affected, but likely to a small degree, the study found.

Still, the report concludes that there aren’t any dramatic impacts expected, and recommends that the push to develop projects proceed carefully, listing a slew of research that should be done to help understand the potential for problems.

Greg Crawford, an oceanographer with Humboldt State University and an author of the paper, said that much depends on what type of wave projects are employed.

“This stuff needs to be approached holistically,” Crawford said.

While some wave energy projects are beginning to be used around the world, there is little information on how durable they are over the long term.

As Crawford pointed out, they are deployed in particularly difficult and treacherous environments.

The report recommends starting small, both in the laboratory and with small-scale projects to help begin to understand the effects they might have when deployed on an industrial scale.

The Pacific Gas and Electric Co. has won authorization from the federal government to study several areas off the Humboldt and Mendocino coasts, but the company recently ran into what appears to be an insurmountable obstacle from state utilities regulators on another project off Trinidad. In October, the California Public Utilities Commission denied the first wave power project it has ever considered, on the grounds that the Trinidad Head proposal isn’t viable, and the contract price to sell the power is too expensive.

A feud of sorts over final jurisdiction on wave energy projects persists between the Federal Energy Regulatory Commission (FERC) and the U.S. Mines and Minerals Service (MMS). And it’s not clear exactly what agency would make the determination of whether the costs of projects outweigh their benefits, said HSU economist Steve Hackett, another author of the study.

“I think it’s a very daunting situation for the public utilities or a power company to take on,” Hackett said.

While environmental issues will be hashed out in an environmental analysis, economic effects should also be considered, Hackett said. That includes the detriments to a struggling fishing fleet and the upside of jobs from energy projects, he said.

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TED NESI, Providence Business News, December 5, 2008

riThe list of suitors lining up to develop renewable energy projects off Rhode Island’s coastal waters is getting longer.

The Federal Energy Regulatory Commission (FERC) has begun reviewing a permit application from Grays Harbor Ocean Energy Co., a year-old company based in Seattle, to build 100 large towers that would generate electricity from wave energy and wind turbines. The towers, which Grays Harbor says would use the same support technology as offshore oil platforms, would be located in a 96-square-mile area of federal waters 12 to 25 miles to the south of Block Island. Wind turbines could be placed on top of the towers, although that would require a separate application process. The company estimates the total cost of the project would be between $400 million and $600 million.

Grays Harbor asserts that the structures, known as Oscillating Water Columns, “will be visible from shore for only a few days a year under extremely clear visibility conditions.”

The company also says it will not need to utilize the entire 96 square miles designated in its federal permit. Instead, it will determine which section of that area would be the most conducive to wind-energy generation.

News of the proposed project comes as state officials continue work on an Ocean Special Area Management Plan (SAMP) for the coastal waters off Rhode Island – a project undertaken in part to facilitate permitting of a $1.5-billion offshore wind farm backed by Gov. Donald L. Carcieri. However, the project proposed by Grays Harbor is outside the area to be covered by the Ocean SAMP.

Rhode Island officials said the company’s application took them by surprise: Grover Fugate, executive director of the R.I. Coastal Resources Management Council, found out about it when the U.S. Minerals Management Service (MMS) forwarded a copy of the document to him as a courtesy.

“It was news to us, when we heard from MMS,” said Laura Ricketson-Dwyer, spokeswoman for CRMC. “But that’s not totally uncommon,” since the CRMC does not have jurisdiction over federal waters. “FERC did not have to notify us.”

The electricity would be transmitted from the converters into an offshore substation, and then the power would be sent to Block Island via a single transmission cable buried about three feet beneath the sea floor. Part of that energy would be used on Block Island, which has some of the highest electricity costs in the country, and the rest would be transmitted to the mainland, coming ashore in the Narragansett village of Jerusalem.

Grays Harbor says it is already in negotiations “with a consortium of local utilities and companies” for them to purchase electricity from the project, and says existing overhead cables could handle the additional load it creates.

Although local officials have doubts about the prospects for wave energy here, Grays Harbor says prior research has given the company confidence it could work in the area. “The site proposed therefore is not speculative,” Grays Harbor president W. Burton Hamner wrote in a letter to FERC Secretary Magalie Salas. “It is the best place for the only technology package we believe will work in that region.” Hamner’s company cites a 2004 study published by the Electric Power Research Institute that said a 100-megawatt wave energy project would be competitive with a 100-megawatt wind farm. But that study looked at wave-energy resources in Massachusetts, not Rhode Island, and Grays Harbor acknowledges in its permit that “Rhode Island wave energy is less than [in] Massachusetts.”

Grays Harbor is specifically applying for a preliminary permit from FERC, which would allow the company to do in-depth research on the project for three years. From there, the company would apply for a pilot project permit, which would allow it to build a 5-megawatt demonstration version of the project. If the pilot project is successful, the company would apply for a standard 30-year FERC permit to build the full-scale development. If all were to go as Grays Harbor hopes, the company expects to have the 5-megawatt demonstration project up and running in 2011, with the full project to follow in 2016.

Grays Harbor cited two issues that could hamper the project: One is the structures’ possible impact on navigation lanes, although the company downplayed the likelihood of that being a problem. The other is the project’s possible impact on fishermen.

“There is no question that where there are wave-energy systems, recreational and commercial fishing will be affected,” the company says in its application. “This is unavoidable because of the conflicting use of the ocean space.” To reduce the project’s impact on fisheries, Grays Harbor said it is considering turning the wave structures into “artificial reefs … that can support fish and other marine organisms.”

The public has until January 28, 2009 to comment on the proposal at the commission’s web site.  The permit application for the Rhode Island offshore wave energy project was filed by Grays Harbor on October 22 and processed by FERC on November 28.

On the same day it submitted its application to develop the Block Island project, Grays Harbor filed applications for nearly identical projects off Cape Cod, New York, New Jersey, Hawaii, and San Francisco and Ventura, Calif.

And in July, the company was granted a preliminary FERC permit for a similar project in Washington state. “Our intention in applying for nearly identical projects in several sites is to achieve significant economics of scale in site evaluation and to help federal agencies develop effective agreements regarding management of ocean renewable-energy projects,” Hamner wrote in his letter to Salas.

But all the projects depend in part on the outcome of a bureaucratic turf war between two federal agencies:

  • The MMS, which was granted jurisdiction over most offshore energy projects by a 2005 federal energy law to the MMS, but which is still completing its final regulations for offshore projects.
  • And the FERC, which already has jurisdiction over inland hydroelectric projects, and this fall asserted its right to review and permit wave-energy projects as well.

Unsurprisingly, Grays Harbor has sided with FERC and agreed that the commission has authority over wave-energy projects. But the company also said the MMS still has jurisdiction over leasing the area in question – an issue the FERC has promised to work out.

In its permit application, Grays Harbor promised to work closely with state and local authorities. The company raised the prospect of establishing public development authorities with area communities to establish co-ownership of the project, and also says it “will develop a Settlement Agreement with stakeholders.”

Grays Harbor also pledged to hire local workers for the project, if possible. “The Providence area has capabilities for manufacturing wave energy converters and every attempt will be made to locally construct the machinery needed for the project,” the company says in its application.

Ricketson-Dwyer, the CRMC spokeswoman, said she is not surprised to see more companies moving quickly to develop ocean-energy projects. “People are – no pun intended – entering the waters here and getting into this.”

The CRMC plans to keep an eye on what happens over the next few weeks, she said, adding: “It’s really to early for us to even know if we have any role in any of this.” Meanwhile, Ricketson-Dwyer said, the proposal underlines the need to finish the state’s Ocean SAMP, in order to streamline the permitting process for offshore energy projects.

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MendoCoastCurrent, November 17, 2008

Announcements and short biographies of Obama’s Team Leads that oversee renewable energy policy development and associated agencies.

Energy and Natural Resources Team Lead
David J. Hayes is a member of the Obama-Biden Transition Project’s Agency Review Working Group responsible for the energy and natural resources agencies. He is former Global Chair of the Environment, Land and Resources Department at Latham & Watkins, an international law firm. He is a Senior Fellow at the World Wildlife Fund, advising the President of WWF on climate change matters, and he is a Senior Fellow at the Progressive Policy Institute, specializing on energy matters. Mr. Hayes is the Vice-Chairman of the national conservation group, American Rivers, and he is the former Chairman of the Board of the Environmental Law Institute. Mr. Hayes was the Deputy Secretary of the Interior during the Clinton Administration. During the 2007-2008 academic year, Hayes was a Consulting Professor at Stanford University’s Woods Institute for the Environment.

Department of Energy Review Team Leads
Elgie Holstein was a Senior Energy Policy Advisor to the Obama for America Presidential Campaign. Under President Clinton, he was Assistant Secretary of Commerce for the National Oceanic and Atmospheric Administration; Associate Director for Natural Resources, Energy and Science at the Office of Management & Budget; Chief of Staff at the Department of Energy; and Special Assistant to the President for Economic Policy at the National Economic Council. He was also Director of State-Federal Relations for energy and environmental programs for the National Conference of State Legislatures, and worked as a congressional aide.

Elizabeth Montoya is currently a Consultant with Sealaska Corporation in Juneau Alaska where she is an expert in human resource management and strategic planning and advises the CEO and COO. Previously, she was Associate Director of Presidential Personnel in the White House, Deputy Chief of Staff at the Department of Energy, and Associate Director of Management and Administration at the Small Business Administration.

Sue Tierney is a Managing Principal and expert on economics, regulation and policy in the electric and gas industries at Analysis Group. She previously served as Assistant Secretary for Policy at the Department of Energy, under President Clinton; Secretary of Environmental Affairs in Massachusetts under Governor Weld; and Commissioner at the Massachusetts Department of Public Utilities under Governor Dukakis.

EPA Review Team Leads
Cecilia V. Estolano is the Chief Executive Officer of the Community Redevelopment Agency of Los Angeles. Prior to joining CRA/LA, Estolano practiced land use and environmental law at Gibson, Dunn & Crutcher. She has served as a Special Assistant to the City Attorney in the Los Angeles City Attorney’s Office, a Senior Policy Advisor to the Assistant Administrator for Air and Radiation at the U.S. Environmental Protection Agency and a member of the California Coastal Commission.

Lisa Jackson was appointed in 2006 by Governor Jon Corzine to lead New Jersey’s Department of Environmental Protection (DEP). Her past experience includes management responsibilities at the Environmental Protection Agency.

Robert Sussman is a Senior Fellow at the Center for American Progress (CAP). During the Clinton Administration, Sussman served as Deputy Administrator of the Environmental Protection Agency, where he played a leading role on Superfund, global warming, science policy and the North American Free Trade Agreement.

FERC Review Team Lead
Rose McKinney-James is the Managing Principal of Energy Works Consulting. Previously she served as the President and CEO of the Corporation for Solar Technology and Renewable Resources (CSTRR) and Chair of the Nevada Renewable Energy Task Force. Past positions also include Commissioner with the Nevada Public Service Commission, Director of the Nevada Department of Business and Industry, Chief of Staff for the City of Las Vegas and Project Manager for the Nevada Economic Development Corporation. McKinney-James serves on the Board of Directors of MGM-Mirage, Employers Insurance Group, Toyota Financial Savings Bank, the Energy Foundation, the American Council for an Energy Efficient Economy (ACEEE), and the Nature Conservancy. She is the Board Chair for Nevada Partners.

Department of the Interior Review Team Leads
John Leshy is a professor of law at the University of California, Hastings College of the Law in San Francisco. Previously he was Solicitor (General Counsel) of the U.S. Department of the Interior; Special Counsel to Chairman George Miller of the Resources Committee, U.S. House of Representatives; professor of law at Arizona State University in Tempe, Arizona; Associate Solicitor of Interior for Energy & Resources; and with the Natural Resources Defense Council (NRDC) in California and the Civil Rights Division of the U.S. Department of Justice in Washington.

Robert Anderson is a professor at the University of Washington School of Law and is the Director of the School’s Native American Law Center. After working for 12 years for the Native American Rights Fund, he was the associate solicitor for Indian affairs and Counselor to Interior Secretary Bruce Babbitt. He is a member of the Bois Forte Band of the Minnesota Chippewa Tribe.

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Keith Johnson, Environmental Capital in WSJ, September 15, 2008

Most of the renewable-energy business is busy fretting about the extension of federal tax credits, which expire at the end of this year. But the real story, it seems, is how clean energy’s biggest historical handicap is coming to be seen as one of its biggest selling points: its predictable cost.

Take offshore wind power, the holy grail of big renewable-energy projects. There’s lots of wind a few miles out at sea; go out far enough, and even Kennedys will stop complaining about eyesores. The U.S. Minerals Management Service, lately notorious for opening other things up, is opening up chunks of the U.S. coastline for wind-farm development.

The problem with offshore wind has always been the cost: The turbines cost more, and installing them and maintaining them costs more than their onshore cousins. That helped torpedo efforts in the U.S. to build offshore wind farms in the past. Or, as the NYT phrased it in its lengthy review of Delaware’s battle to become the first U.S. state to embrace offshore wind with the Bluewater Wind Park:

Offshore marine construction was wildly, painfully expensive — like standing in a cold shower and ripping up stacks of thousand-dollar bills.

How did a cold shower turn into an offshore wind farm blessed by same the local power company that had actively lobbied against it? Two words: energy prices.

From the NYT: “Energy markets went significantly higher — and scarily so, particularly in the last six months,” [Bluewater Wind boss Peter Mandelstam] said. Indeed, oil has skyrocketed, and the price of Appalachian coal has more than doubled this year. Tom Noyes, a Bluewater supporter, blogger, and Wilmington-based financial analyst, says that a year ago, “the numbers that both sides of this debate were throwing around were largely academic. Now, those numbers are visceral.” Against this backdrop of steadily climbing energy prices, Bluewater’s offer of stable-priced electricity — an inflation-adjusted 10 cents per kilowatt hour for the next 25 years — became something that no utility, it seems, could credibly oppose. “A few decision-makers got it early on,” Mandelstam said, “some got it slightly later and [local power company] Delmarva finally got it.”

Wind power is suddenly becoming more attractive because the fuel is free; what makes it expensive is the up-front capital costs of the turbines and wind farm installation. That’s almost the opposite case with power sources like natural gas, where the upfront costs are pretty low, and the fuel bill is the main variable.

At a time of wildly volatile oil, coal, and gas prices around the world, that kind of long-term price predictability is a big advantage. The city of Houston is saving money on its power bill after switching one-quarter of its municipal power needs to fixed-price wind-power contracts.

It worked on Delmarva, too. President Gary Stockbridge told Delaware state authorities one of the main reasons he was able to finally agree to purchase power from the Bluewater wind farm was that ratepayers wouldn’t get stuck with much higher utility bills—which is what Delmarva had initially warned about when it opposed the wind farm.

In just the last two months, though, oil prices have collapsed; crude fell below $100 Monday. So the question for Bluewater and every other embryonic offshore wind farm in the U.S. remains the same: Will fossil fuels stay pricey enough to keep renewable energy attractive, or are fresh subsidies the sector’s only hope?

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ISABEL ORDONEZ, Dow Jones News Service, October 6, 2008

Surfers aren’t the only ones itching to jump in the water and catch some big waves.

Dozens of companies, from oil giant Chevron Corp. to smaller firms like Ocean Power Technologies Inc., have invested in or are evaluating the potential of technology designed to harness electrical energy from waves, tides and currents.

Ocean Power, of Pennington, N.J., and Verdant Power Inc., of New York, are among the firms that already have built or plan to build wave and tidal power stations in oceans or adjacent waters. Others, such as Chevron, are seeking government approval to study the feasibility of such projects. All are in a race to harness what some scientists contend is among the nation’s largest unexploited sources of renewable energy.

“Chevron is monitoring ocean energy technology and considering how it might be integrated into our operations,” says Kim Copelin, a spokeswoman for the San Ramon, Calif., company, which is seeking a permit from the Federal Regulatory Energy Commission to start researching a possible tidal-power project in Alaska’s Cook Inlet.

These projects represent a rebirth of interest in the ocean and other waters as a source of energy, which intensified during the 1970s oil crises but fizzled in the 1980s when the price of oil dropped. Now, with concerns growing about global climate change, foreign oil dependency and rising commodity prices, companies and governments are taking another look.

Ocean-energy technology is in its infancy, and big hurdles to its widespread use remain. Among them: figuring out how to economically produce power on a large scale without harming marine life, and navigating a permitting process that companies say is lengthy and cumbersome but that some government agencies say is necessary to protect the environment.

Despite the hurdles, supporters believe there is an abundance of energy sitting off the U.S. coast just waiting to be tapped. While the amount of energy currently being produced by ocean-energy projects is minuscule, the Electric Power Research Institute — the research arm of U.S. utility companies — estimates that oceans eventually could supply about 10% of the electricity consumed in the U.S.

“Oceans are an enormous resource that should be seriously considered as part of the U.S. renewable energy portfolio,” says Sean O’Neill, president of the Ocean Renewable Energy Coalition, a national trade organization. Oceans “have waves, tides, currents, even offshore winds that don’t need to compete for precious land resources to generate plenty of electricity.”

Predictability of Tides

Companies are using a variety of devices to create electricity from moving water.

Ocean Power, for example, uses a network of buoys. The up-and-down movement of the ocean’s waves is converted into hydraulic pressure by pistons and cylinders located inside the buoys. That pressure spins a turbine, which turns a generator. The resulting electricity is sent ashore via an underwater cable. The company has a contract with the U.S. Navy to install and test its devices off the Marine Corps base at Kaneohe Bay, Hawaii. It also is working with a utility company in California and Oregon to build four wave-power stations, pending federal approvals.

verdantVerdant Power, meanwhile, produces power for a supermarket and parking lot using six underwater turbines in New York’s East River. The movement of water from the river’s tides turns blades on the turbines, creating a rotary motion that runs a generator. The company says it has a list of customers waiting for it to get the necessary approval to start generating electricity on a larger scale.

The prime territory in the U.S. to harvest energy from wave power is in the Pacific Ocean, off the coasts of Hawaii, Alaska, Oregon, Washington and northern and central California. The optimum spot for tapping into ocean currents, which are steady flows of water going in a prevailing direction, is off the shores of south Florida, while parts of the Alaska coastline, including the upper Cook Inlet around Anchorage, have some of the strongest tides in the world. The edges of Maine, New York, San Francisco and Washington state’s Puget Sound also look to be ideal for tidal energy, researchers say.

Tidal energy is drawing special interest because, though intermittent, it is more predictable than wind, solar or wave energy. While those energy sources rely on the weather, tides depend on the position of the sun, Earth and moon and gravitational forces that can be accurately predicted years in advance, says Roger Bedard, ocean energy leader at the nonprofit Electric Power Research Institute.

Regulatory Jockeying

New York, Maine, Alaska and other coastal states are investing in ocean energy projects, as is the U.S. Department of Energy, which spent $7.5 million in fiscal 2008 and could spend as much as $35 million in fiscal 2009 to help advance the viability and cost competitiveness of ocean water driven power systems.

“We need everything we can get to try to address energy supply issues,” says Steven Chalk, deputy assistant secretary for renewable energy at the Department of Energy. “If we have a true supply diversification, we will be less vulnerable to, say, rising oil prices.”

But proponents of ocean energy say private investment is being deterred by what they call an overly lengthy and complicated permitting process. Companies sometimes need more than 20 local, state and federal regulatory permits to start ocean energy research, says Mr. O’Neill of the Ocean Renewable Energy Coalition. As an example, Verdant Energy says it has spent more than $2 million on environmental research and waited more than five years to get to the final stages of obtaining the permits it needs to install more underwater turbines and produce electricity on a larger scale.

“In a perfect world, the U.S. will have a fast way to deal with new emerging technologies that allow companies to get into the water and start testing how efficient the equipment is and to measure the environmental impacts,” says Mr. O’Neill. “But that is just a dream.”

The projects facing the biggest logjams are those proposed for federal waters on the outer continental shelf, which generally begins three miles beyond the U.S. shoreline. Companies interested in generating energy from that part of the ocean need approval from both the Federal Energy Regulatory Commission — the U.S. agency that regulates interstate natural gas and electricity transactions — and the U.S. Minerals Management Service, a branch of the Interior Department that oversees offshore energy development.

An effort to end what many companies say is a jurisdictional overlap was unsuccessful, and last month, the Minerals Management Service unveiled a set of proposed permitting rules, including environmental regulations, that it expects to have in place by later this year.

Mark Robinson, director of the office of energy projects at FERC, says his agency believes the Minerals Management Service’s proposed process is too long and costly and “will work to the disadvantage of an industry” that is trying to get on its feet.

The Minerals Management Service says that it is still evaluating comments on its proposed rules but that it has two main responsibilities when it comes to offshore energy production: securing the nation’s energy resources and protecting the environment. “We take both very seriously,” says David Smith, the agency’s deputy chief of public affairs. “We work to try to find that balance.”

In the meantime, the Minerals Management Service is granting interim leases that allow companies to test the energy potential in various spots in the ocean. More than 10 companies have obtained interim leases to begin work along the coasts of Delaware, New Jersey, Georgia, Florida and California. Still, there are no guarantees that those businesses will be able to obtain approval to work the patches of ocean they are researching.

Moving Too Fast?

Ocean-energy projects are also making surfers and fishermen nervous. Those groups say they want to be consulted on any proposed projects because the impact on ocean recreation, ecology, public safety and fishing remains mostly unknown.

“What we want is that any company who wants to put a project in waters used by commercial fishermen contact the local fishermen group and work with them so they don’t harm the fishing industry,” says Linda Buell of the Fisherman’s Advisory Committee of Tillamook, a large coastal county in Oregon. “Nothing right now is written into the rules.”

Marine scientists, meanwhile, want more research done on the unintended consequences that large ocean-energy structures could have on marine organisms. These structures could possibly conflict with migratory pathways of great whales, says George Boehlert, director of the Hatfield Marine Science Center at Oregon State University. “But this is largely unknown,” he says.

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MendoCoastCurrent, October 16, 2008

The Federal Energy Regulatory Commission (FERC) claimed that it has jurisdiction over hydroelectric projects located on the Outer Continental Shelf (OCS), pointing to laws that define its role.

FERC addressed the jurisdictional question, raised by the U.S. Department of the Interior, Mineral Management Service (MMS), in the context of a rehearing order on two preliminary permits issued to PG&E to study the feasibility of developing wave energy projects in the OCS off the California coast. The projects are the Humboldt Project off the coast of the Samoa Peninsula in Humboldt County near Eureka, and the Mendocino Project off the coast of Fort Bragg in Mendocino County.

Commissioner Philip Moeller said the development of viable hydrokinetic resources needs a streamlined process like FERC’s. “It is indisputable that renewable energy is a valuable resource and hydrokinetic projects could harness a vast resource of new hydropower,” he said. “Instead of legal battles, my preference, and this Commission’s, has been to reach out to federal agencies and states to work in a cooperative manner to the same goal: timely development of a new renewable power resource in a responsible manner after input from all affected stakeholders.”

MMS has asserted that FERC only has jurisdiction to issue licenses and preliminary permits for projects within state waters, which for most states is defined as extending three miles offshore. Projects beyond state waters are considered to be located in the OCS.

But FERC says the Federal Power Act (FPA) gives it two bases of authority to issue preliminary permits and licensees for hydroelectric projects located on the OCS. First, the law expressly grants FERC jurisdiction to license in “navigable waters” without limitation as well as in “streams or other bodies of water over which Congress has jurisdiction.” 

The second authority is for those projects located on “reservations” of the United States. FERC concludes that the OCS is land owned by the United States, qualifying it to be a “reservation” under the FPA. “The Supreme Court of the United States has consistently held that the United States owns the submerged lands off its shores, beginning from the low-water mark,” FERC said.

Finally, FERC addressed comments by MMS about the meaning of the Federal Energy Policy Act of 2005 (EPAct 2005) as it relates to the jurisdiction question for hydroelectric projects located on the OCS. MMS asserted that EPAct 2005 intended for MMS to be the lead federal regulatory authority over wave and ocean current energy projects in the OCS.

In this order, FERC notes that EPAct 2005 does not limit the scope of its authority over hydroelectric power or withdraw FERC jurisdiction over projects in the OCS. “To the contrary, Congress expressly preserved the Commission’s comprehensive hydroelectric licensing authority under the FPA by including two saving clauses….,” FERC said.

FERC Chairman Kelliher stressed today that FERC recognizes the role of Interior, which through the Minerals Management Service (MMS) manages lands on the OCS. There is no conflict with FERC’s role as the licensing agency, he said.

“We have proposed a Memorandum of Understanding (MOU) with MMS that carefully delineates the roles of the two agencies in a manner that respects both our licensing, and Interior’s resource, roles,” Kelliher said. “We stand ready to enter into the MOU to clarify those roles.”

A preliminary permit gives the holder of a permit priority over the site for three years while the holder studies the feasibility of developing the site. It does not authorize construction of any kind. A license authorizes construction and operation of a hydroelectric facility.

FERC’s order also finds that although two local governments, the City of Fort Bragg and Mendocino County, asserted that they did not receive personal notification from FERC of the filing of the preliminary permit applications, only Mendocino County acted in a timely manner once it received actual notice of the application in order to preserve its right to intervene. As a result, Mendocino County’s request for late intervention is granted. However, the order finds that Mendocino has not provided grounds for the Commission to revoke the Mendocino Project permit or to reopen that proceeding. The order also denies motions for late intervention in both proceedings by FISH Committee.

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MendoCoastCurrent, September 9, 2008

Saying the nation’s energy situation has dramatically changed in the past year, Secretary of the Interior Dirk Kempthorne today jumpstarted the development of a new oil and natural gas leasing program for the U.S. Outer Continental Shelf.  The action could give the next administration a two-year head start in expanding energy production from federal offshore jurisdictions, including some areas where a congressional ban had prevented oil and gas development.

“When our current five-year program for Outer Continental Shelf oil and gas leasing was launched in July 2007, oil was selling for $64 a barrel,” Kempthorne said.  “Today a barrel of oil costs more than $120, almost double the price a year ago. Clearly, today’s escalating energy prices and the widening gap between U.S. energy consumption and supply have changed the fundamental assumptions on which many of our decisions were based.”

“Areas that were considered too expensive to develop a year ago are no longer necessarily out of reach based on improvements to technology and safety,” Kempthorne noted.  “The American people and the President want action and this initiative can accelerate an offshore exploration and development program that can increase production from additional domestic energy resources.”

President Bush lifted the Executive Withdrawal on oil and gas leasing operations on the Outer Continental Shelf on July 14, calling on Congress to lift its ban that has been in place since 1982.  He also urged Congress to enact legislation that would allow states to have a say regarding operations off their shores and to share in the resulting revenues.

“The President believes coastal states should have a voice in how Outer Continental Shelf resources are developed off their shores while ensuring those environments are protected. Also, Congress should provide a way for the federal government and states to participate in revenue sharing from those new leases,” Kempthorne said.

Because of the current energy situation and the President’s action, Secretary Kempthorne has directed the Minerals Management Service to begin the initial steps for developing a new five-year program <http://www.mms.gov/5-year/#new> that accurately reflects the nation’s needs.  The multi-year process starts with a call for information <http://www.mms.gov/5-year/PDFs/E8-17708.pdf> from all parties on what a new five-year program should consider.  MMS is also requesting comment to ensure that all interests and concerns are considered regarding oil and gas leasing and exploration and development resulting from a new five-year program. The governors of all 50 states will be specifically asked for their comments, particularly on issues unique to each state.

“This initiative could provide a significant advantage for the incoming administration, offering options it would not otherwise have had until at least 2010,” Kempthorne said. “Today’s action would provide a 2-year head start for the next administration on developing a new five-year program.”

The current program runs from 2007-2012 and includes 21 lease sales in eight of the 26 Outer Continental Shelf planning areas in the Gulf of Mexico, Alaska and the Atlantic.  It does not include areas under a congressional ban, with the exception of Virginia.  The new program, depending on public comment, can consider any area although any leasing in a banned area would need congressional action.

The Outer Continental Shelf currently provides 27% of U.S. domestic oil production and 15% of domestic natural gas production — most of that from the Gulf of Mexico.  The areas under a congressional ban contain an additional 18 billion barrels of oil and 76 trillion cubic feet of natural gas in yet-to-be-discovered fields.

Those numbers are considered conservative estimates because little exploration has been conducted in most of those areas during the past quarter of a century because of the congressional ban.  Interior’s estimates are based on available data.  Estimates tend to increase dramatically as technology improves and exploration activities occur.

This initiative uses the process mandated by the Outer Continental Shelf Lands Act Amendments of 1978 which give the Secretary of the Interior authority to develop “out-of-cycle” leasing programs and requires various procedural steps, including several rounds of public comment and multiple environmental reviews.

Comments may be submitted on or before September 15, 2008 by using MMS’ Public Connect online commenting system or by mail.

5-Year Program Comments

The MMS must receive all comments and information by September 15, 2008.

Please submit your comments using only one of these formats, and include full names and addresses. Comments submitted by other means may not be considered. We will not consider anonymous comments, and we will make available for inspection in their entirety all comments submitted by organizations and businesses, or by individuals identifying themselves as representatives of organizations and businesses. Our practice is to make comments, including the names and home addresses of respondents, available for public review. An individual commenter may ask that we withhold from the public record, his or her name, home address, or both, and we will honor such a request to the extent allowable by law. If you submit comments and desire that we withhold such information, you must so state prominently at the beginning of your submission.

via the web: https://ocsconnect.mms.gov/pcs-public/do/ProjectDetailView?objectId=0b011f80802ab320

via e-mail: 5YearRFIComments@mms.gov

via mail: Mail comments and information on the program (e.g., size, timing and location of areas to be offered for lease) to:

Ms. Renee Orr, 5-Year Program Manager
Minerals Management Service (MS-4010)
381 Elden Street
Herndon, VA 20170

Environmental comments and information relevant to oil and gas development on the OCS should be sent to:

Mr. James F. Bennett, Chief, Branch of Environmental Assessment Minerals Management Service (MS-4042)
381 Elden Street
Herndon, VA 20170

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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.

AND

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.

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MendoCoastCurent, August 12, 2008

Last Friday the Federal Energy Regulatory Commission (FERC) released its latest denial for a rehearing on the Mendocino Wave Energy project on the Northern California coast.

The denied Petitioners include Fishermen Interested in Safe Hydrokinetics (FISH) with Attorney Elizabeth Mitchell, Mendocino County, Fort Bragg, Lincoln County in Oregon and others representing concerned citizens, local city/county governments as well as local fishermen wishing to be party to wave energy development on the Mendocino coast.

In this power showdown, where federal energy policymakers are swiftly moving towards the deployment, testing and exploration of wave energy generating devices on the Mendocino coast, FERC has made it clear that they do not wish to have local and community involvement or participation, period.

And the implications of this denial are far reaching as it appears this Mendocino coast wave energy development project shall be ‘ground zero’ as the first U.S. wave energy project to explore wave energy policymaking, development, deployment and generation (the Makah Bay project is located off Native American lands in the state of Washington).

Before reading on, please take a look at FERC Denial Order: HERE The language of the Order is indecipherable to a layperson. One wonders what this order actually states.

From a more general view, the Petitioners’ have sought to become full-fledged participants in matters related to wave energy projects licensing and development on the Mendocino coast. The local groups, local governments and concerned citizenry of Fort Bragg are also calling for appropriate environmental studies/testing before deployment.

The Mendocino coast continues to inspire locals as well as visitors from around the world with its dramatic beauty, its richness in bounty, its rugged, wildness…and its awesome power. Mendocino locals wish to share this reverence and general knowledge, their oceanic and micro-climate experience…and contribute their knowledge toward a successful and environmentally-benign test of today’s nascent wave energy technology.

It is MendoCoastCurrent’s view, and possibly not a popular one, that appropriate and environmentally-benign wave energy technologies may be developed and successfully implemented. There are literally hundreds of different wave devices available today. Straight out the shoot, many are inappropriate for the Mendocino coast due to sea depth and upswell, some devices are simply pipedreams while others may be suitable — meaning, a device that may sustainably work within the harsh ocean environment, not diminish the sea flora/fauna, sea creatures or man and beneficial in scaling electrical energy output.

Yet in this FERC Denial it’s clear that FERC does not seek the necessary dialog and community ownership that will enable this project’s success.

Additionally, FERC is in the process of developing wave energy ‘conditioned licenses’ to streamline development and FERC has chosen to not incorporate rulemaking (allowing public input) in developing their licensing policies. An associate federal agency, the Mineral Management Service (MMS) that rules beyond the FERC three-mile limit to 200 miles out to sea (the outer continental shelf) is now in ‘rulemaking’ process for hydrokinetic projects. Thus, MMS is asking for comments to be submitted by September 8, 2008…see article here with MMS links to share your comments.

 

MendoCoastCurrent awaits local responses, legal analyses and federal energy policymakers’ next steps.

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MADDALENA JACKSON with MendoCoastCurrent edit, The Sacramento Bee, August 11, 2008

Oil companies, some politicians and commuters paying $4 for a gallon of gas might look at California’s coast and think of crude oil pooled below the sea floor.

California’s North Coast, however, holds promise of another energy bounty.

In less time than it would take to fire up new offshore oil drills, waters off our coast could host undulating buoys driven by waves, producing abundant electricity for a power-thirsty state.

The Electric Power Research Institute estimates enough wave power can be extracted from coastal waters to account for about 15% of California’s electricity production.

Offshore wave technology is promising, but it’s untried. They also raise concerns about potential damage to the coast’s prized vistas and fish industry.

One proposal that’s progressing is to draw electricity from waves off the Mendocino coast already has generated problems for developers, government agencies and coastal residents.

Moreover, the potential for waves depends on someone building transmission lines to connect offshore power to the state’s grid.

Northern California’s biggest utility company, Pacific Gas and Electric Co., may be that someone.

Out at sea, the ocean’s surface ripples rhythmically, and the up-and-down motion can be harnessed to produce electrical energy, via bobbing buoys, jointed snakes and undulating tubes.

PG&E plans to capture some of that potential. It has preliminary permits for two projects – one off Fort Bragg in Mendocino County and one off Eureka.

The Fort Bragg project, expected to yield 40 megawatts of electricity, would be “an undersea power plug,” said PG&E project manager Bill Toman. It “would provide about 20% of electricity consumption of Mendocino County.”

PG&E would build the expensive transmission lines. The utility would select three or four developers to test their power generators.

Results will lead to “a decision about whether we would build our own wave energy farm,” he said.

Mendocino coast residents are examining PG&E’s plans with cautious concern.

“Wave energy sounds like a good idea, as long as it doesn’t harm the environment,” said Bruce Lewis, a nature photographer and volunteer light-keeper at the Point Cabrillo Light Station. “Using the power of the waves seems like a better way of generating power than building oil platforms off the coast.”

Others are wary. “When you first hear about it, you think, ‘That’s a great idea!’ ” said Jim Martin, director of the Recreational Fishing Alliance.

He’s concerned wave power may interfere with fisheries. He wonders if electrical signatures from the devices also might disturb fish.

His biggest complaint right now, however, is that local fishermen and residents have had no say in the planning.

Martin is also associated with Fishermen Interested in Safe Hydrokinetics, or FISH. With local lawyer Elizabeth Mitchell, FISH is battling for a role in the planning.

A federal deadline has passed for gaining an official voice in the legal planning for the wave projects, alongside PG&E and federal energy regulators.

Mitchell has filed a request for a belated entree with the Federal Electric Regulatory Commission. She argues that an isolated community, with limited high-speed Internet service, and few residents who even know what FERC is, could not have met the deadline.

Mitchell said she’s concerned that permits have been granted without environmental analysis or even identified technology. “We are guinea pigs for a worldwide science experiment without any rational planning.”

PG&E’s permit comes from FERC. But there is a question over wave power jurisdiction. The federal Minerals Management Service has jurisdiction from three to 200 miles offshore, and by years end hopes to have rules in place for alternative energy leases, said spokesman John Romero.

FERC, however, oversees onshore hydropower applications and has claimed jurisdiction for wave technology up to 12 miles offshore, based on its reading of legal documents.

“It’s a problem for anyone in charge of proposing a project,” PG&E’s Toman said. “At some point, it will hold things up.”

A delay would be welcome, Martin said. “A huge reason people come up here is to look at the ocean, and to reconnect with nature.”

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Platts/McGraw-Hill, August 2008

Ocean Power Technologies (OPT) is looking to generate power from Scottish waters as well. Nasdaq-listed OPT reported July 28 that it had signed a berth agreement with the European Marine Energy Center (EMEC) in Orkney, Scotland. OPT can, under the berth agreement, deploy and operate its unit as well as hook up to EMEC’s dedicated 2-MW subsea cable connected to the Scottish grid and will sell power to the grid up to the unit’s 2-MW capacity limit, using the EMEC berth for other deployments.

Across the Atlantic, wave energy development in the United States, another country looking to assume market leadership, suffered a temporary setback in late June 2008 when Finavera Renewables scuttled plans for a wave energy project off the Oregon coast to focus on developing the technology needed for other projects.

Finavera let preliminary permits granted by the Federal Energy Regulatory Commission (FERC) expire by not filing required reports. FERC cancelled Finavera’s preliminary permit on June 26 for the proposed 100-MW Coos Country project, saying the company had failed to file six-month progress reports on studies that the company was required to perform for the project to move forward. The preliminary permit allowed for further site assessment and so-called micro siting to determine the best location for the proposed wave park, and allowed studies on such topics as oceanographic conditions, marine mammal resources, shoreline conditions, and public safety. “We had to focus some of our resources on a couple [of] other high priority projects,” said Myke Clark, vice president of corporate development for Finavera.

These include a planned 2-MW wave energy initiative at Makah Bay, California, which has already secured a long-term power purchase contract in December 2007 with California utility Pacific Gas & Electric – the first commercial PPA for a wave project in North America. In developing the new technology, engineers are tackling such challenges as the intermittency of waves and how to produce electricity from new types of equipment cheaply enough to make it profitable, he said. “We’re definitely in an intensive phase right now in terms of this technology,” Clark said, adding that the company is cancelling the project because “we need to focus a bit more on the technology development.”

The marine energy industry in America faces policy as well as technology obstacles.

As FERC promotes development of hydrokinetic energy and companies seize opportunities, the agency has issued preliminary permits that allow environmental assessments and other studies to be performed – only to have its regulatory authority questioned by other federal agencies.

The US Department of the Interior in April 2008 asserted that FERC lacked the authority to issue leases for hydrokinetic projects on the Outer Continental Shelf and called on FERC to rehear its decisions to issue two preliminary permits for wave electricity projects being considered off the coast of California.

FERC issued a license to Finavera in December 2007 for a 1-MW wave energy project in Clallam County, Washington, but several parties sought rehearing of the decision, claiming FERC violated the Clean Water Act by issuing a license before the state ecology department had issued a water quality certificate and other state permits and authorizations. In a March 20 order FERC said the rehearing requests are moot since the state issued the necessary permits to Finavera in February 2008. FERC said that its initial order was a conditional license that did not authorize construction or installation of facilities and “expressly stated that no such authority would be granted until Finavera obtained all necessary authorizations.”

The US wave energy industry received a boost in late July 2008, though, when the US Minerals Management Service, the federal agency that regulates offshore energy development, said it intends to issue leases for thirteen alternative energy research projects in the federal waters of the Outer Continental Shelf, including wave-energy projects off the California coast.

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GreenCarCongress.com, July 26, 2008

The US Minerals Management Service (MMS) is proceeding with the consultation and analyses necessary to move toward the issuance of limited leases under its interim policy for authorizing alternative energy data collection and technology testing activities on the Outer Continental Shelf (OCS).

MMS announced its interim policy in November 2007 to jumpstart basic information gathering efforts relating to development of OCS alternative energy resources such as wind, waves, and ocean currents as authorized by the Energy Policy Act of 2005 (EPAct). The limited leases envisioned under the interim policy will be for a term of five years and will not convey any right or priority for commercial development.

Following the initial announcement, MMS received more than 40 nominations of areas proposed for limited leasing off the west and east coasts. In April MMS identified a subset of 16 proposed lease areas for priority consideration and provided public notice of those areas for the purpose of determining competitive interest as required by EPAct and for receiving relevant environmental or other information. The comment period on the April notice closed on June 30. A brief description of the information received and MMS’s decisions concerning the 16 proposed lease areas follows.

  • New Jersey, Delaware, and Georgia—the 10 lease areas (six off NJ, one off DE, and three off GA) proposed for site assessment activities relating to wind resources drew no competing nominations and no significant comment. MMS will proceed with a noncompetitive leasing process for these sites.
  • Florida—three of the four lease areas off the southeast coast proposed for site assessment or technology testing activities relating to ocean current resources received competing nominations, and comments concerning the areas were favorable. MMS will proceed with a noncompetitive leasing process for the one site that did not receive competing nominations. Due to timing constraints inherent in the interim policy, as well as bureau budget and staffing considerations, MMS has decided not to proceed with a competitive auction for the other areas. Instead, the competing nominators have been asked to collaborate in order to enable interested parties to jointly benefit in information gathering under leases issued noncompetitively.
  • California—neither of the two areas off Northern California (Humboldt and Mendocino Counties) proposed for site assessment and technology testing relating to wave resources drew new competing nominations. However, based on two original overlapping nominations in the Humboldt area from the initial Call for Nominations in Nov. 2007, MMS has determined that there is competitive interest in that proposed lease area. MMS also received numerous comments from local stakeholders concerned about potential use conflicts and environmental issues in both areas. For the Mendocino area, MMS has decided to proceed with a noncompetitive leasing process, working with the applicant and local stakeholders to refine the area and scope of proposed activities and to address other local concerns. For the Humboldt area, MMS has decided not to hold a competitive auction and to ask the competing nominators to collaborate. If they agree to collaborate, MMS will proceed with a noncompetitive leasing process as in the Mendocino area.

The process for issuing limited leases under the interim policy will entail thorough environmental analysis under the National Environmental Policy Act and related laws, as well as close consultation with federal, state, and local government agencies as required by EPAct.

The limited leases that will be issued under the interim policy will enable the lessees to collect information that will be useful for potential commercial projects in the future under an MMS regulatory program that is in development.

MMS published a proposed OCS alternative energy rulemaking on July 9, 2008. When final, this rule will govern all future commercial OCS alternative energy activities and will apply to any future commercial development in the areas leased under the interim policy. Limited leaseholders wishing to conduct commercial activities will need separate authorization under the final rule that is adopted.

The MMS interim policy is ongoing pending the adoption of a final rule governing OCS alternative energy activity. Interested parties may continue to submit nominations, and MMS may act on other nominations that already have been received or are received in the future.

The specific companies involved with the proposed projects are listed below:

  • Delaware: Bluewater Wind Delaware LLC (wind resources data collection)
  • New Jersey: Bluewater Wind New Jersey Energy LLC (3 OCS blocks for wind resources data collection). Fisherman’s Energy of New Jersey (wind resources data collection). Winergy Power LLC (2 OCS blocks for wind resources data collection)
  • Georgia: Southern Company (3 OCS blocks for wind resources data collection)
  • Florida: Aquantis LLC/Aquantis Development Co. Inc. (ocean current data collection and technology testing)
  • California: Pacific Gas & Electric Co. (wave resources data collection, offshore Mendocino)

There is one proposed lease area off California and three off Florida where there is overlapping interest. For those areas, MMS is investigating whether the companies are interested in collaborating on resource data collection activities. Those companies are:

  • California: Pacific Gas and Electric Co. and Marine Sciences (wave resources data collection offshore Humboldt)
  • Florida: Proposed lease area 1: Oceana Energy Co and Vision Energy LLC (ocean current resource data collection). Proposed lease area 2: Marine Sciences and Vision Energy LLC (ocean current resource data collection). Proposed lease area 4: Florida Power & Light Co and Vision Energy LLC (ocean current resource data collection).

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JOHN DRISCOLL, The Times-Standard, July 24, 2008

The Pacific Gas and Electric Co. has cleared another hurdle toward developing wave energy projects off the Humboldt and Mendocino county coasts.

Recently the U.S. Minerals Management Service announced that it would go forward with analyzing limited leases for alternative energy projects on the outer continental shelf. It follows a decision by the Federal Energy Regulatory Commission to grant preliminary permits to PG&E for the project, which envisions eight to 200 wave energy devices somewhere from two to 10 miles offshore.

FERC oversees such projects within three miles of the coast, while the Minerals Management Service has jurisdiction beyond that.

The process for issuing limited leases under an interim policy formed in November 2007 will entail “thorough environmental analysis under the National Environmental Policy Act and related laws, as well as close consultation with federal, state and local government agencies,” the service said in a press release.

The Pacific Fisheries Management Council wrote to the Minerals Management Service in June expressing concern that multiple wave test projects could have cumulative effects on sea life and the commercial fishing fleet. The potential effects should be evaluated at an “ecosystem scale” before projects are installed, the letter reads.

The Mineral Management Service leases will allow PG&E to collect information for potential commercial projects in the future.

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EnergyCurrent.com, July 30, 2008

U.S. Secretary of the Interior Dick Kempthorne has started the development of a new oil and natural gas leasing program for the U.S. Outer Continental Shelf. The action could give the next administration a head start in expanding energy production from federal offshore jurisdictions, including some areas where a congressional moratorium has restricted oil and gas development.

Reacting to current energy prices and president George W. Bush’s lifting of the presidential ban on offshore drilling, Secretary Kempthorne has directed the U.S. Minerals Management Service (MMS) to begin the initial steps for developing a new five year program. The multi-year process starts with a call for information from all parties on what a new five year program should consider.

MMS is also requesting comment to ensure that all interests and concerns are considered regarding oil and gas leasing and exploration and development resulting from a new five year program. The governors of all 50 states will be specifically asked for their comments, particularly on issues unique to each state.

The current program runs from 2007-2012 and includes 21 lease sales in eight of the 26 Outer Continental Shelf planning areas in the Gulf of Mexico, Alaska and the Atlantic. It does not include areas under a congressional ban, with the exception of Virginia. The new program, depending on public comment, can consider any area although any leasing in a banned area would need congressional action. If approved the new program would begin in 2010 and end in 2015.

Kempthorne said, “Today a barrel of oil costs more than $120, almost double the price a year ago. Clearly, today’s escalating energy prices and the widening gap between U.S. energy consumption and supply have changed the fundamental assumptions on which many of our decisions were based.”

“The American people and the President want action and this initiative can accelerate an offshore exploration and development program that can increase production from additional domestic energy resources.”

“This initiative could provide a significant advantage for the incoming administration, offering options it would not otherwise have had until at least 2010,” Kempthorne added.

“Today’s action would provide a two year head start for the next administration on developing a new five-year program.”

The Outer Continental Shelf currently provides 27% of U.S. domestic oil production and 15% of domestic natural gas production, the majority of this from the Gulf of Mexico. MMS believes that the areas under a congressional ban contain an additional 18 billion barrels of oil and 76 Tcf of natural gas in yet-to-be-discovered fields.

MMS considers the numbers conservative estimates because little exploration has been conducted in most of those areas during the past 25 years because of the congressional ban. The estimates could increase with new technology and exploration techniques.

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DAVID R. BAKER, The San Francisco Chronicle, July 31, 2008

The U.S. Interior Department ratcheted up the pressure on Congress Wednesday to open more of the country’s coastline to offshore oil drilling, a move petroleum companies have sought for decades.

Interior Secretary Dirk Kempthorne said his department will lay the groundwork for selling undersea oil-drilling leases on the outer continental shelf, including areas now protected by a congressional ban. Republicans are pushing hard to end the moratorium, which was imposed in 1982 and covers most of the East and West coasts.

The Interior Department has no authority to lift the ban. But if Congress votes to open the coasts to drilling, the department could hit the ground running, selling leases as early as 2011. Exploratory drilling would probably begin a few years after that.

“Americans continue to struggle with high gas prices, and it’s important that we do more to develop domestic sources of energy,” Kempthorne said.

As a first step, the Interior Department will solicit comments from oil companies, state governors, environmental groups and others as to which specific stretches of seafloor should be leased for drilling. The department will consider areas that are already open – such as the Gulf of Mexico – as well as those that aren’t.

The move pleased oil industry groups as well as politicians who want more offshore oil production.

“We’ve got to get off foreign oil. We’ve got to use our own domestic production,” said Rep. Ken Calvert, R-Corona (Riverside County), who introduced legislation this month to lift the moratorium. He said royalties from oil pumped off the California coast could be a boon to state government.

“I think it’s a better solution than raising taxes,” Calvert said. “Why don’t we take advantage of the resources we know we have and help address the structural deficit problem in California?”

But leading congressional Democrats remain adamantly opposed to lifting the ban. They note that most of the estimated oil reserves on the outer continental shelf – about 79% – lie in areas that are already open to drilling.

“This is nothing more than a political stunt to divert attention from the high gas prices that have resulted from having two oil men in the White House,” California Sen. Barbara Boxer said Wednesday.

Environmental groups also panned the Interior Department plan. Like the congressional Democrats, they want the nation to invest more heavily in alternative energy sources and start weaning itself off oil.

“There’s simply no way, with 2% of the world’s oil reserves, that you can solve our problems by drilling” on the outer continental shelf, said Jim Presswood, an energy issues advocate for the Natural Resources Defense Council.

Interior Department officials said Wednesday that they also want to increase the development of alternative energy sources offshore. For two years, the department has studied leasing portions of the outer continental shelf to companies that want to build offshore windmills or install buoys that generate electricity as they bob up and down on the waves.

PG&E has proposed two such wave energy projects off the coasts of Humboldt and Mendocino counties.

The Interior Department’s alternative energy effort will dovetail with the new push on offshore oil drilling, Kempthorne said.

“Alternative energy development and traditional energy development are not mutually exclusive,” he said.

Although the department will ask for comments from governors, that doesn’t mean the governors would be able to veto offshore drilling in federal waters near their states. States control the waters within 3 miles of shore, but can’t directly control development farther out.

Kempthorne and other Interior Department officials emphasized on Wednesday their desire to work with the governors. But they said Congress would have to determine how much authority to give the states should legislators lift the drilling moratorium.

California Gov. Arnold Schwarzenegger opposes offshore drilling. This week, the Republican governor touted an agreement with his counterparts in Oregon and Washington to work together to protect the coastal environment, an agreement that includes rejecting offshore oil drilling.

“The governor understands that people are frustrated with the soaring price of gas, but in California, we know offshore drilling is not the answer,” said Schwarzenegger spokeswoman Lisa Page.

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MendoCoastCurrent, July 9, 2008

ACT NOW! – ‘MMS Rulemaking’ Public Review & Comments Accepted Thru September 8, 2008

The U.S. Department of the Interior’s Minerals Management Service (MMS) has published a proposed rule in the Federal Register that will regulate alternative energy production activities and alternate uses of existing facilities on the Outer Continental Shelf (OCS). The proposed rule is accompanied by a draft environmental assessment analyzing the potential environmental effects of the rulemaking in accordance with the National Environmental Policy Act.

MMS conducting ‘rulemaking’ to establish a program to grant leases, easements, and rights-of-way (ROW) for orderly, safe, and environmentally responsible alternative energy project activities and alternate uses of existing facilities on the OCS. The rule will also establish methods for sharing revenues generated by this program with nearby coastal States.

“This proposed rule would establish formally the framework for developing wind, wave, ocean current, solar and other renewable energy sources on America’s Outer Continental Shelf,” Assistant Secretary Stephen C. Allred said. “With this important step we can add to our ability to reduce our reliance on foreign energy by making the best use of our own domestic resources in a safe and environmentally sensitive way.”

The Energy Policy Act of 2005 authorized MMS to establish the OCS Alternative Energy and Alternate Use (AEAU) Program. Alternative energy includes, but is not limited to wind, wave, solar, ocean current and generation of hydrogen. Alternate uses of existing facilities may include aquaculture, research, education, recreation or support for offshore operations and facilities.

The process for completing the rulemaking began after the enactment of the Energy Policy Act of 2005. The Advanced Notice of Proposed Rulemaking was issued in December of 2005. The Final Programmatic Environmental Impact Statement (PEIS) was issued in November of 2007. This was followed by the release of the Record of Decision for the Final PEIS in January of 2008. The next step in the process, after the 60-day comment period on today’s proposed rule ends, will be the release of the Final Rule and final environmental assessment. The Final Rule is expected to be complete by December 2008.

Publisher’s Note: The MMS is seeking your comments on rulemaking for alternative energy projects…here’s their description: “The MMS is proposing regulations that would establish a program to authorize and manage alternative energy project activities on the OCS, as well as certain previously unauthorized activities that involve the alternate use of existing facilities located on the OCS; and would establish the methods for sharing revenues generated by this program with nearby coastal states”

Wish to Comment?

The proposed rule and draft environmental assessment invite public comments from interested parties by one of two methods:

1. Federal eRulemaking Portal. Under the tab “More Search Options,” click Advanced Docket Search, then select “Minerals Management Service” from the agency drop-down menu, then click “submit.” In the Docket ID column, select MMS-2008-OEMM-0012 (you may need to go to the page 2 to locate) for submitting your public comments and viewing supporting/related materials available for this rulemaking.

2. Mailing your comments to the following address:

Minerals Management Service
Offshore Energy and Minerals Management
Alternative Energy and Alternate Use Team
381 Elden Street Herndon, Virginia 20170-4817

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MendoCoastCurrent, July 8, 2008

Act Now! Related ‘MMS Rulemaking’ Public Review & Comments Accepted Thru September 8, 2008

WASHINGTON, DC — The Minerals Management Service (MMS) announced today that it is proceeding with the consultation and analyses necessary to move toward the issuance of limited leases under its interim policy for authorizing alternative energy data collection and technology testing activities on the Outer Continental Shelf (OCS).

“This is another important step in the advancement in the OCS Alternative Energy Program,” said MMS Director Randall Luthi. “I am excited about our progress and am looking forward to working with the states and communities to move forward with these proposed activities.”

MMS announced its interim policy in November 2007 to jumpstart basic information gathering efforts relating to development of OCS alternative energy resources such as wind, waves, and ocean currents as authorized by the Energy Policy Act of 2005 (EPAct). The limited leases envisioned under the interim policy will be for a term of five years and will not convey any right or priority for commercial development.

Following the initial announcement, MMS received more than 40 nominations of areas proposed for limited leasing off the west and east coasts. In April MMS identified a subset of 16 proposed lease areas for priority consideration and provided public notice of those areas for the purpose of determining competitive interest as required by EPAct and for receiving relevant environmental or other information. The comment period on the April notice closed on June 30. A brief description of the information received and MMS’s decisions concerning the 16 proposed lease areas follows.

New Jersey, Delaware, and Georgia—the 10 lease areas (six off NJ, one off DE, and three off GA) proposed for site assessment activities relating to wind resources drew no competing nominations and no significant comment. MMS will proceed with a noncompetitive leasing process for these sites.

Florida—three of the four lease areas off the southeast coast proposed for site assessment or technology testing activities relating to ocean current resources received competing nominations, and comments concerning the areas were favorable. MMS will proceed with a noncompetitive leasing process for the one site that did not receive competing nominations. Due to timing constraints inherent in the interim policy, as well as bureau budget and staffing considerations, MMS has decided not to proceed with a competitive auction for the other areas. Instead, the competing nominators have been asked to collaborate in order to enable interested parties to jointly benefit in information gathering under leases issued noncompetitively.

California—neither of the two areas off Northern California (Humboldt and Mendocino Counties) proposed for site assessment and technology testing relating to wave resources drew new competing nominations. However, based on two original overlapping nominations in the Humboldt area from the initial Call for Nominations in Nov. 2007, MMS has determined that there is competitive interest in that proposed lease area. MMS also received numerous comments from local stakeholders concerned about potential use conflicts and environmental issues in both areas. For the Mendocino area, MMS has decided to proceed with a noncompetitive leasing process, working with the applicant and local stakeholders to refine the area and scope of proposed activities and to address other local concerns. For the Humboldt area, MMS has decided not to hold a competitive auction and to ask the competing nominators to collaborate. If they agree to collaborate, MMS will proceed with a noncompetitive leasing process as in the Mendocino area.

The process for issuing limited leases under the interim policy will entail thorough environmental analysis under the National Environmental Policy Act and related laws, as well as close consultation with federal, state, and local government agencies as required by EPAct.

The limited leases that will be issued under the interim policy will enable the lessees to collect information that will be useful for potential commercial projects in the future under an MMS regulatory program that is in development.

MMS published a proposed OCS alternative energy rulemaking on July 9, 2008. When final, this rule will govern all future commercial OCS alternative energy activities and will apply to any future commercial development in the areas leased under the interim policy. Limited leaseholders wishing to conduct commercial activities will need separate authorization under the final rule that is adopted.

The MMS interim policy is ongoing pending the adoption of a final rule governing OCS alternative energy activity. Interested parties may continue to submit nominations, and MMS may act on other nominations that already have been received or are received in the future.

Publisher’s Note: The MMS is seeking your comments on rulemaking for alternative energy projects…here’s their description: “The MMS is proposing regulations that would establish a program to authorize and manage alternative energy project activities on the OCS, as well as certain previously unauthorized activities that involve the alternate use of existing facilities located on the OCS; and would establish the methods for sharing revenues generated by this program with nearby coastal states”

Wish to Comment?

The proposed rule and draft environmental assessment invite public comments from interested parties by one of two methods:

1. Federal eRulemaking Portal. Under the tab “More Search Options,” click Advanced Docket Search, then select “Minerals Management Service” from the agency drop-down menu, then click “submit.” In the Docket ID column, select MMS-2008-OEMM-0012 (you may need to go to the page 2 to locate) for submitting your public comments and viewing supporting/related materials available for this rulemaking.

2. Mailing your comments to the following address:

Minerals Management Service
Offshore Energy and Minerals Management
Alternative Energy and Alternate Use Team
381 Elden Street
Herndon, Virginia 20170-4817

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DAVID R. BAKER, Village Green/SFGate.com, July 23, 2008

Drilling for undersea oil along the east and west coasts has quickly turned into one of America’s loudest political fights, as anyone reading the comments on SFGate can attest. But it’s not the Bush administration’s only plan for offshore energy.

For the past few years, the administration has been studying how to open the coasts to renewable energy projects, things like wave farms and underwater turbines designed to generate electricity by harnessing the tides. The Minerals Management Service — the same federal agency that sells offshore oil leases — has quietly pieced together a program to grant leases for testing renewable energy projects at sea.

On July 23, 2007, the service reported that it would move forward with the lease program, which will include two locations along the northern California coast.

Pacific Gas and Electric Co., California’s largest utility, wants a lease to study wave power off of Humboldt and Mendocino counties. Oil giant Chevron proposed a similar study along Mendocino but later dropped the project. A smaller company, Marine Sciences of San Diego, is seeking a lease that would cover some of the same offshore areas as PG&E’s Humboldt proposal.

The Minerals Management Service wants PG&E and Marine Sciences to collaborate on the project, rather than grant the two companies overlapping leases. Each lease will cover a specific patch of the ocean and will run for five years. Companies receiving the leases will be allowed to test equipment at sea — equipment such as buoys that generate electricity as they bob up and down on the waves. But the companies will not be allowed to set up commercial operations there.

Before any leases are handed out, the service will continue studying potential environmental pitfalls. Some north coast residents worry that a cluster of power-generating bouys tethered to the seafloor could interfere with fishing or the migration of whales. The service would like to start handing out leases as early as this fall and may be able to do so with some sites on the east coast. But the California leases could easily take longer, said service spokesman John Romero.

“The hope is we can do these things sooner than later, but bottom line, we’re not going to compromise the environmental review process,” he said.

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Publishers Note: In early August 2008, FERC Denied Rehearing the Mendocino Coast related to the following post. This is one in a series of actions that Federal Government has taken to obstruct community involvement and begin the necessary dialog on environmental concerns.

MendoCoastCurrent, July 21, 2008

An alliance of Northern California coast commercial and recreational fishing associations known as Fishermen Interested in Safe Hydrokinetics (FISH) has announced that the Federal Energy Regulatory Commission (FERC) is extending its time to consider the FISH committee request for public participation and environmental analysis in developing federal licensing regulations for nascent wave energy generation projects.

In this Request for Rehearing to FERC, the FISH committee seeks a public-notice-and-comment rulemaking process for the federal licensing of hydrokinetic (wave energy) FERC energy development projects, implementation of a Programmatic Environmental Impact Statement and compliance with other federal laws such as the Clean Water Act and the Coastal Zone Management Act. Also joining in this request are the County of Mendocino, the City of Fort Bragg, the Recreational Fishing Alliance and Lincoln County, Oregon.

As the Mendocino coast may lead the United States in wave energy generation exploration, it’s evident to the FISH Committee, coastal governments and concerned citizens that there is a need for responsible federal energy development guidelines and practices including national regulations and environmental impact study before any FERC wave energy licenses are issued. These sought-after guidelines and procedures require rulemaking with public participation in tandem with environmental impact analysis through-out the wave energy development process, including the offshore experimental and pilot stages of exploration.

In the past, the FERC response to concerns on wave energy development has been to exclude rulemaking and shun public input. A comment made by FERC Commissioner Philip Moeller and noted in a New York Times article underlines their position, “Let’s get this stuff in the water and find out what it has to offer.”

Unlike FERC, a related federal agency also involved in wave energy development, the Minerals Management Service or MMS, is utilizing a public process to develop regulations for ocean wave energy projects and has completed a Programmatic Environmental Impact Statement.

The project areas of consideration are two wave energy projects proposed for the coast off Mendocino County, one of the most productive marine areas on the West Coast. One proposal covers 68 square miles, and the second covers 17 square miles. Both wave energy projects would require significant exclusion zones in the last remaining fishing grounds off Mendocino County.

“Naturally, fishermen are concerned whenever we hear proposals to close off big areas of the ocean to fishing, but we’re just as concerned about the potential environmental impacts to marine species our fisheries depend on,” said Jim Martin of the Recreational Fishing Alliance (RFA), a national grassroots political lobby for saltwater sportfishermen, and one of the founding members of FISH. “We hope FERC uses the extra time it has extended itself to carefully consider these issues and do the right thing.”

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Minerals Management Service, April 17, 2008

Issues Notice to Determine Competitive Interest in Nominated Areas

WASHINGTON — The Department of the Interior’s Minerals Management Service today designated five areas on the Outer Continental Shelf as priority areas for alternative energy research in federal waters.

The five areas are offshore New Jersey, Delaware, Georgia, Florida and California. The agency is proposing limited, temporary leases in these areas for data collection and technology testing related to wind, wave and ocean current energy development. There will be no commercial energy production activity associated with the proposed leases.
“This is a major step forward in expanding our nation’s energy portfolio,” said MMS Director Randall Luthi during a speech today at the Global Marine Renewable Energy conference in New York. “The information gained from research in these areas will greatly increase our understanding of the vast renewable energy potential just off our coast,” he said.

The agency received over forty nominations for alternative energy research projects in response to a November 2007 Federal Register notice. Of those, 16 could potentially go forward within the five priority areas. Ten of those proposed projects are related to wind energy and would be located in the areas offshore New Jersey, Delaware and Georgia. Four proposals offshore Florida would be related to ocean current energy, and two off Northern California would be related to wave energy. The remaining nominations are still being considered by MMS and decisions will be based on the proposed projects’ viability.

Prior to leases actually being issued or consideration of specific project proposals, the agency must first determine if competitive interest exists for research in the five areas. MMS must also evaluate other information related to those areas such as environmental factors and current commercial activities such as fishing and shipping.

The agency issued a Federal Register notice to be published Friday, April 18 that provides details about the five areas along with instructions for the public to provide comments. Individuals or organizations with competitive interest will have 30 days to provide comments, and the agency will accept public comments on the proposed lease areas for 60 days. The Federal Register notice will be published tomorrow.

The November notice also established interim guidelines for alternative energy research and testing on the OCS. MMS is preparing final regulations for the OCS Alternative Energy and Alternate Use program in accordance with the Energy Policy Act of 2005 and hopes to publish those regulations by the end of the year.

“We are excited to be moving forward and hope to work with interested and affected parties to advance our knowledge of important offshore energy resources,” stated Director Luthi.

Comments may be submitted by either of the following methods:

1. Federal eRulemaking Portal: Under the tab “More Search Options,” click Advanced Docket Search, then select “Minerals Management Service” from the agency drop-down menu, then click “submit.” In the Docket ID column, select MMS-2008-OMM-0020 to submit public comments and to view supporting and related materials available for this rulemaking.

2. Mailing your comments to the following address:

Minerals Management Service
Offshore Minerals Management
Alternative Energy and Alternate Use Team
381 Elden Street
Herndon, Virginia 20170-4817

The Energy Policy Act of 2005 authorized MMS to establish the OCS Alternative Energy and Alternate Use (AEAU) Program. Under this authority, MMS will regulate alternative energy projects and projects that involve the alternate use of existing oil and gas platforms on the OCS. Alternative energy includes, but is not limited to wind, wave, solar, underwater current and generation of hydrogen. Alternate uses of existing facilities may include aquaculture, research, education, recreation, or support for offshore operations and facilities.

Contact: Gary Strasburg, 202-208-3985

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MMS nominated both Humboldt and Mendocino lease areas last Friday. See following for full details, emphasis added.

Federal Register: April 18, 2008 (Volume 73, Number 76)
———————————————————————–

DEPARTMENT OF THE INTERIOR

Minerals Management Service – Docket No. MMS-2008-OMM-0020

Notice of Nominations Received and Proposed Limited Alternative Energy Leases on the Outer Continental Shelf (OCS) and Initiation of Coordination and Consultation

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Announcement of nominations and processing priorities, inquiry on competing nominations for proposed limited alternative energy leases, and request for comments from interested and affected parties.

———————————————————————–

SUMMARY: On November 6, 2007, the Minerals Management Service (MMS) published in the Federal Register (72 FR 214, pp. 62673-62675) a request for information and nominations of areas for leases authorizing alternative energy

[[Page 21153]]

resource assessment and technology testing activities pursuant to
subsection 8(p) of the OCS Lands Act, as amended.
We received over 40 nominations of areas for limited leases
authorizing such activities relating to wind, wave, and ocean current
energy resources on the OCS. The MMS has considered the nominations in
light of relevant criteria for proceeding with the issuance of leases.
As required by subsection 8(p), MMS must issue such leases on a
competitive basis unless we determine after public notice that there is
no competitive interest. Subsection 8(p) also requires MMS to
coordinate and consult with relevant Federal agencies and affected
State and local governments concerning the issuance of OCS alternative
energy leases. This Notice provides the required public notice of
proposed leases by announcing the nominations that MMS has decided to
process as a priority and inquiring as to the existence of any
competitive interest in these nominated areas. Also, with this
announcement we intend to inform all interested and affected parties of
these nominations and invite comments and information–including
information on environmental issues and concerns–that will be useful
in our consideration of the nominated areas for the issuance of limited
alternative energy leases.

DATES: The MMS requests any competing nominations and relevant comments and information by May 19, 2008. As it pertains to nominations, this is a strict deadline, and nominations received after the deadline will be not be considered by MMS for the purpose of determining competitive interest in the areas originally nominated. Other comments may be submitted within 60 days.

ADDRESSES: You may submit your comments by one of two methods:
(1) Federal eRulemaking Portal: http://www.regulations.gov. Under
the tab “More Search Options,” click “Advanced Docket Search,” then
select “Minerals Management Service” from the agency drop-down menu,
then click “submit.” In the Docket ID column, select MMS-2008-OMM-
0020 to submit public comments and to view supporting and related
materials available for this rulemaking. Information on using
Regulations.gov, including instructions for accessing documents,
submitting comments, and viewing the docket after the close of the
comment period, is available through the site’s “User Tips” link. The
MMS will post all comments.
(2) Mailing your comments to the following address: Minerals
Management Service, Offshore Minerals Management, Alternative Energy
and Alternate Use Team, 381 Elden Street, Herndon, Virginia 20170-4817.

FOR FURTHER INFORMATION CONTACT: Ms. Maureen Bornholdt, Minerals
Management Service, Offshore Minerals Management, 381 Elden Street,
Mail Stop 4080, Herndon, Virginia 20170-4817, (703) 787-1300.

SUPPLEMENTARY INFORMATION:
Public Comment Policy. Before including your address, phone number,
e-mail address, or other personal identifying information in your
submission, you should be aware that your entire submission–including
your personal identifying information–may be made publicly available
at any time. While you may ask us in your comment to withhold your
personal identifying information from public review, we cannot
guarantee that we will be able to do so.
Background. Under the interim policy described in the November 6,
2007, Federal Register Notice referenced above, MMS stated its
intention to issue limited OCS alternative energy leases for a term of
5 years that would authorize resource assessment and technology testing
activities, subject to specific terms and conditions. That Notice
invited respondents who wish to acquire limited OCS alternative energy
leases to nominate areas of interest by January 7, 2008. On December
14, 2007, MMS published in the Federal Register (72 FR 240, pp. 71152-
71157) a Notice of new information collection that presented a proposed
“Lease of Submerged Lands for Alternative Energy Activities on the
OCS” and requested comments by February 12, 2008.
In addition to the nominations submitted by prospective lessees,
MMS received numerous comments from proponents of OCS alternative
energy development, including industry associations. Several of those
comments stated that the interim policy should be revised to provide a
right to commercial development for those who acquire leases for
resource assessment and technology testing. As MMS stated in the
November 6, 2007, Federal Register Notice, the interim policy is
intended to permit the collection of resource assessment and technology
testing data in support of future development activity without any
priority right for future commercial development. It is designed to
begin the process in the acquisition of needed information about a
variety of OCS conditions under a relatively simple authorizing
process. Conveyance of full commercial development rights would entail
a much lengthier and complicated process than MMS is willing to
undertake at this time under the interim policy.
Therefore, MMS reiterates and reaffirms its interim policy as
originally formulated and proposed. Further, in the absence of
promulgated rules, MMS does not plan to revise the interim policy or
adopt a new policy to authorize commercial development of OCS
alternative energy. We will continue to defer consideration of
commercial OCS alternative energy projects until regulations governing
alternative energy activities on the OCS are in place, except with
respect to the two proposed projects that are the subject of the
savings provision of section 388 of the Energy Policy Act of 2005.
Prospective lessees, both the original nominators and those
responding to this Notice, must show that they are qualified to hold an
OCS lease before MMS will consider their proposals. The qualifications
for holders of OCS oil and gas leases set forth at 30 CFR 256.35
provide useful guidance in this regard to prospective limited
alternative energy lessees. Limited alternative energy lease holders
must also comply with all terms and conditions of their lease (see the
December 14, 2007, Federal Register Notice of the proposed lease form).
As stated in the November 6, 2007, Federal Register Notice proposing
the interim policy, a limited lease will grant the lessee the exclusive
right to conduct the activities identified in the lease on the
designated lease area. Acquisition of a limited lease will not grant
the lessee any rights with respect to the future acquisition of
commercial development rights for the leased site.
Nominations. We received nominations on the Atlantic and Pacific
Coasts. Most of the Atlantic Coast nominations are for meteorological
and oceanographic data collection facilities that would support wind
energy projects off of the coasts of Massachusetts, New York, New
Jersey, Delaware, Maryland, Virginia, South Carolina, and Georgia.
There also are nominations for areas off of the coast of Florida
focused on ocean current information collection and technology testing.
On the Pacific coast, the main interest is in wave energy, and nominations were received for areas off California, Oregon and Washington.
The MMS has decided to give priority consideration to issuing
limited leases for: (1) Data collection activities relating to wind
resources off of the coasts of New Jersey, Delaware, and Georgia; (2)
data collection and technology testing activities relating to current
resources off of the coast of Florida; and (3) data

[[Page 21154]]

collection and technology testing activities relating to wave resources off of the coast of Northern California. These locations of proposed OCS alterative energy limited leasing are described as follows:

—————————————————————————————————————-
Official protraction
Adjacent state diagram Block(s) Resource
—————————————————————————————————————-
1. New Jersey………………….. Hudson Canyon NJ 18-03. 6451………………….. Wind.
2. New Jersey………………….. Wilmington NJ 18-02…. 6936 and 7131………….. Wind.
3. New Jersey………………….. Wilmington NJ 18-02…. 6931………………….. Wind.
4. New Jersey………………….. Wilmington NJ 18-02…. 6738………………….. Wind.
5. New Jersey………………….. Wilmington NJ 18-02…. 7033………………….. Wind.
6. Delaware……………………. Salisbury NJ 18-05….. 6325………………….. Wind.
7. Georgia…………………….. Brunswick NH 17-02….. 6074………………….. Wind.
8. Georgia…………………….. Brunswick NH 17-02….. 6174………………….. Wind.
9. Georgia…………………….. Brunswick NH 17-02….. 6126………………….. Wind.
10. Florida……………………. Bahamas NG 17-06……. 7103………………….. Current.
11. Florida……………………. Bahamas NG 17-05……. 7040 and 7090………….. Current.
Bahamas NG 17-06……. 7001, 7002, 7003, 7004, ………………..
7005, 7006, 7007, 7051,
7052, 7053, 7054, 7055,
7056, 7057, 7104, 7105,
7106, and 7107.
12. Florida……………………. Bahamas NG 17-06……. 6702, 6703, 6704, 6705, Current.
6706, 6707, and 6708.
13. Florida……………………. Miami NG 17-08……… 6040………………….. Current.
14. Florida……………………. Bimini NG 17-09…….. 6001………………….. Current.
15. California…………………. Ukiah NJ 10-02……… 6405, 6455, 6456, 6504, Wave.
6505, 6506, 6554, 6555,
6604, 6605, 6654, 6655,
6704, and 6705.
16. California…………………. Eureka NK 10-10…….. 6031, 6032, 6033, 6080, Wave.
6081, 6082, 6083, 6130,
6131, 6132, 6133, 6179,
6180, 6181, 6182, 6229,
6230, 6231, 6232, 6279,
6280, 6281, 6330, and 6331.
—————————————————————————————————————-

The above locations refer to areas identified on the Official
Protraction Diagrams that are available from each MMS regional office
and online at http://www.mms.gov/ld/Maps.htm, and the areas are
identified as OCS blocks that are generally nine square miles in size.
The nominated areas may be located on those maps or on a map viewer
maintained by MMS at http://www.mms.gov/offshore/RenewableEnergy/
WebMappingViewer.htm.
The MMS reviewed in detail all nominations we received and
established our priority areas for initial leasing in light of
considerations such as technological complexity, timing needs,
competing use issues, and relationships to relevant state-supported
renewable energy activities, as well as considerations relating to
limited available MMS staff and budget resources for processing and
managing limited leases. We also took into consideration the
desirability of authorizing the advancement of activities relating to
each of the alternative energy resource types cited in the
nominations–wind, current, and wave.
We chose proposed leasing locations off of the New Jersey and
Delaware coasts primarily because the installation of data collection
facilities relating to wind would support the concurrent efforts by
those States to foster commercial development of wind power on the
adjoining OCS. We also selected the area off of the coast of Georgia as
a site for limited leasing related to wind because of the ongoing
efforts of Southern Company and the Georgia Institute of Technology
Strategic Energy Institute to acquire wind data to determine the
technical and economic feasibility of locating an OCS wind energy
project off of the coast of Georgia. Their efforts include the use of
existing U.S. Navy meteorological and oceanographic data collection
platforms and other lower elevation facilities for several years. They
now propose to gather critical data at a substantially higher height.
We chose proposed leasing locations off of the coast of Florida,
because the data collection and technology testing activities relate to
ocean currents. The State of Florida has supported ocean current
research through the Florida Atlantic University Center of Excellence
in Ocean Energy Technology, which includes several academic, Federal
Government, and private industry participants.
We chose two proposed leasing locations off of the coast of Northern California, specifically offshore Humboldt and Mendocino Counties, because the data collection and technology testing activities relate to ocean wave activities. The areas were nominated to conduct alternative energy resource assessment and technology testing with respect to the WaveConnect Projects proposed by Pacific Gas and Electric Company in each area. The Pacific Gas and Electric Company has sought or obtained permits from other Federal agencies and has applied to the California Public Utilities Commission for funds to conduct studies related to these projects.
It is important to note that MMS has not made any final decision to
award leases in the areas identified in this Notice. We have identified
these areas as our priorities for potentially authorizing limited
leases under this interim policy, and through this Notice we are
soliciting comments to determine if competitive interest exists in
these areas. Nominations that were not selected for processing as a
priority, as well as additional nominations received in the future, may
be processed by MMS at a later date. We have chosen to process a lease
or group of leases relating to each type of alternative energy resource
in accordance with our staff and budget resources and associated timing
considerations. Many of the nominations that were not selected for
priority processing appear to entail complex technology (e.g., new
deeper-water designs) or environmental or conflicting use concerns that
would make processing them more difficult and time consuming.
Request for Competing Nominations. As stated above, the areas that
have been nominated for proposed alternative energy limited leases are
identified as blocks on the OCS Official Protraction Diagrams. While we
received some nominations for areas smaller than OCS blocks, we have
decided that the minimum size for limited leases issued under the
interim policy will be a block or aggregation of blocks but will not be
smaller than a block. Upon acquisition of such a lease, a lessee may
contract the

[[Page 21155]]

original lease area by relinquishing aliquot parts of the lease, a part
as small as \1/16\ of a block.
We request respondents who wish to compete for limited leases for
the areas identified in this Notice to submit a nomination identifying
the block(s) in which you are interested, the resource(s) you want to
assess (e.g., wind, current, wave) and the technology you want to test.
Also, provide a general description of the type and number of
installations or technologies you would use and a project schedule for
the activities you propose. Your nomination of an area must be
consistent with the type of alternative energy resource identified for
that area (e.g., a nomination off of the coast of New Jersey must
pertain to data collection activities relating to wind resources). A
nomination that is not consistent with the resource identified for a
specific area will not be considered. The block(s) you wish to nominate
should be identified using the information on Official Protraction
Diagrams available as described above. Also, if you submit such a
nomination, please provide the name, telephone number, and e-mail
address of an individual for the MMS to contact.
With this request MMS is inviting nominations from parties who have
not previously submitted nominations for the areas identified in this
Notice and are interested in acquiring leases only for one or more of
the blocks listed above. Those who have already submitted nominations
for these areas should not resubmit the same nomination. A nomination
received in response to the November 6, 2007, Federal Register Notice
will be considered active unless the original nominator notifies MMS in
writing that the nominator is no longer interested in obtaining a lease
for the area originally nominated. If an original nominator is
interested in competing for a lease area identified in this Notice and
it was not the original nominator of that site, it must submit a new
nomination for that lease area as provided in this Notice. If you have
not already submitted a nomination and wish to submit one for an area
listed above, you must submit by the deadline stated above. Late
submissions will not be considered.
MMS Analysis of Nominations. The MMS will consider the nominations
received in response to this Notice along with the original
nominations. We will determine that there is competitive interest for
any proposed lease area that receives more than one nomination and that
there is no competitive interest for any area that receives only one
nomination. In instances where our analysis determines that there is
competitive interest, we will contact the competing nominators to
explore options for collaboration or refinements of proposals before
considering options for proceeding with a competitive auction. If we
receive a competing nomination that only partially overlaps a multiple-
block original nomination, we may determine that there is no
competition, because in such a case the proposed lease area subject to
competition would comprise the entire multiple-block original
nomination. However, based on the information we receive in response to
this notice, MMS may decide to issue a subsequent public notice
requesting expressions of interest in the partial area where the
competing nominations overlap separate from the remainder of the
multiple-block area proposed for lease.
In instances where our analysis concludes that there is no
competitive interest in a previously nominated area, we will contact
the nominators and proceed with noncompetitive lease issuances as time
and resources allow. However, we may first choose to explore options
for collaboration in the interest of optimizing efficiency. The MMS
will publicly announce the results of its analyses to determine
competitive interest and its intentions to proceed with the issuance of
leases.

Coordination and Consultation

The MMS invites all interested and affected parties to submit comments and information pertaining to the nominated areas listed above. We believe such input would be useful as we consider these areas for limited leasing, and we especially welcome information concerning geographic characteristics and environmental resources, as this will assist us in our environmental review processes. We seek information on the nominated areas relating to other ocean and seabed uses, relationships to onshore energy markets of the nominated areas, and applicable State and local laws and policies. We also request comments and suggestions on how we may best coordinate and consult comprehensively and efficiently to comply with applicable Federal, State, and local laws and policies. Officials of MMS intend to contact Federal, State, and local government counterparts during the comment period to discuss the nominations and the process for issuing limited OCS alternative energy leases under the interim policy. Such discussions may explore methods to foster intergovernmental coordination, including whether to establish intergovernmental task forces with Federal, State, and local entities for this purpose.

Dated: April 2, 2008.
Randall B. Luthi,
Director, Minerals Management Service

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Note: This is an older article from 2007 yet still very current in its coverage of environmental and permitting concerns related to Wave Energy and Tidal Energy projects.

MICHAEL LUFKIN & LAURA FANDINO, Marten Law Group, July 11, 2007

The adoption of renewable energy portfolio standards promises to push forward investment in the development of wave and tidal power. Projects are being developed in New York, Washington, Oregon, California and other states, spurred in part by state laws requiring public and private utilities to obtain a portion of their electricity from renewable resources. As an example, Oregon recently adopted a renewable electricity portfolio standard which requires the state’s largest utilities to meet 25% of their electric load with new renewable energy resources by 2025. Challenges to these projects include the environmental and land use impacts associated with them. Just as wind power has drawn its share of opponents, so too are critics of tidal and wave energy raising concerns about the impacts of large-scale development of these resources.

What is Tidal and Wave Energy?

Two types of marine renewable energy resources have garnered substantial interest: wave energy and tidal energy. There are several methods to capture energy from ocean surface waves. For example, one wave power device slated for use by Finavera Renewables, Ltd. (“Finavera”) in Makah Bay, Washington, involves the use of moored wave energy conversion buoys (the “Aquabuoy”) similar in size to the large navigational aids that demarcate shipping lanes. Aquabuoy converts the kinetic energy of the vertical motion of waves into pressurized water, which is directed into a conversion system consisting of a turbine that drives an electrical generator. The power from the buoys is then transported to shore through the use of an anchored submarine transmission cable installed on or just beneath the sea floor. While the Finavera plans to operate the Makah Bay project 3.7 miles offshore, wave energy devices may be used at the shoreline, nearshore, and offshore.

Another ocean energy resource, tidal energy, captures energy from the rise and fall of tides. Most tidal energy projects rely on offshore turbines, which operate much like an underwater wind farm. The ebb and flow of the tides is used to turn the blades which are connected directly to an electrical generator. Energy produced by the system is transferred to shore through the use of a submarine transmission cable installed on the sea floor. In France, and several other countries, tidal energy production has involved the construction of a dam (or barrage) to block incoming and outgoing tides across a delta, estuaries, or other coastal basin area, where the amplitude of tides are increased. In that case, the ebb and flow of the tides is used to turn turbines, or push air through a pipe which then turns a turbine, that drives an electric generator.

Preliminary Projects

Eight tidal energy projects are currently under development in Washington State that use offshore turbine technology. On March 9, 2007, the Snohomish County Public Utility District (“PUD”) received preliminary permits from the Federal Energy Regulatory Commission (“FERC”) to conduct technical and economic feasibility studies and evaluate tidal energy potential at seven locations in Puget Sound: Spieden Channel, San Juan Channel, Guemes Channel, Agate Pass, Rich Passage, Admiralty Inlet and Deception Pass. FERC has also granted a preliminary permit to Tacoma Power to evaluate the development of tidal power in the Tacoma Narrows. Each of the preliminary permits will enable these entities to study tidal energy at the permitted sites for a period of three years.

In addition to Washington State, FERC has issued preliminary permits for tidal energy projects in Alaska, California, Maine, Oregon, and New York. In New York, the Verdant Power Roosevelt Island Tidal (“RITE”) Project, is on its way to becoming the first tidal energy project to be licensed by FERC. FERC granted a preliminary permit for the RITE project, located in New York’s East River, in September 2002. FERC is licensing the RITE project under the authority granted through the preliminary permit. The project will consist of 200 turbines and will generate up to 10 MW of distributed power.

In addition, Finavera is currently developing a 1 MW demonstration wave power plant at Makah Bay, Washington. The company completed a Preliminary Draft Environmental Assessment in October of 2006 which concluded with a finding of no significant environmental effects from the technology. In Oregon, FERC issued preliminary permits to Ocean Power Technologies (“OPT”) to develop a project off the coast of Reesport, southwest of Eugene, and AquaEnergy Group, Ltd. to develop an offshore wave energy project in Coos Bay.

Environmental Concerns

The primary concerns raised by critics of tidal and wave energy projects are their potential adverse impacts on marine ecosystems, fishery resources, and mammals. Environmental concerns raised by these groups include noise, species’ effects, and the physical disturbance of marine habitat. Environmental noise is said by some to affect the behavioral patterns of marine species i.e., feeding, mating and migration in areas where the habitat of protected marine species overlaps with the project. Habitat disturbance is also raised as a concern, as is displacement of benthic organisms in the footprint of the construction, including endangered or threatened species. Other concerns raised are the potential loss of fishing areas and impacts on shellfish resources.

Operating concerns include: (a) potential injuries to marine wildlife and diving birds arising from direct contact with tidal energy turbines; (b) behavioral impacts to marine species; (c) habitat disturbance, including disturbance of contaminated sediments, and impacts to sensitive spawning and nursery areas; (d) water quality impacts; and (e) hydrodynamic impacts. Hydrodynamic impacts resulting from the extraction of energy and physical presence of tidal project structures can include direct alteration of area siltation patterns, and changes to area ecology by alteration of substrate type.

Additional Barriers to Commercial Development

Permitting Process

Because of the relative infancy of wave and tidal energy development, there remains some uncertainty and confusion over which federal and state agencies have regulatory jurisdiction over marine energy projects. Generally speaking, a project’s location determines which federal agency takes the lead in overseeing the permitting process. Under the Federal Power Act (“FPA”), FERC has the authority to regulate and license all hydroelectric facilities on navigable waters of the United States. FERC has interpreted its authority under the FPA broadly to include essentially all wave and tidal energy projects, including ocean projects. In 2005, Congress muddied the jurisdictional waters by granting lead federal agency status to the Minerals Management Service (“MMS”) for renewable energy projects on the Outer Continental Shelf (“OCS”). Congress stated, however, that in granting MMS lead agency status over projects on the OCS, it was not eliminating the jurisdiction of other federal agencies. Thus for now, it appears that FERC and MMS will share lead agency status for OCS projects, while FERC will have exclusive authority to license projects in rivers and ocean waters out to the OCS.

The FERC Process

Most of the tidal and wave energy projects under consideration in the Pacific Northwest have not formally entered the FERC licensing process. Rather, these projects have received a preliminary permit from FERC which reserves a project location for the permit holder while environmental and feasibility studies are conducted. The preliminary permit is valid for three years. At the end of the three years, the permit holder must file a license application or lose priority for the location. Construction activities are not allowed during the period in which a project is being studied under a permit.

To construct and operate a tidal or wave energy project a developer must either obtain a hydropower operating license from FERC, or be granted an exemption from licensing. The process for obtaining a FERC operating license can often take five to seven years and requires significant analysis and consultation with state, federal, and tribal resource agencies. Operating licenses are normally granted for 30 to 50 year periods.

Because of the burdensome nature of the licensing process, some developers have sought an exemption from FERC licensing requirements. FERC may exempt hydropower projects “which are 5 megawatts or less, that will be built at an existing dam, or projects that utilize a natural water feature for head or an existing project that has a capacity of 5 megawatts or less and proposes to increase capacity.” FERC has shown a willingness to grant short term exemptions that allow for the deployment and testing of new generation technology. Projects determined to be exempt from FERC licensing requirements must still comply with applicable state and federal environmental and resource protection laws.

Transmission

Another issue affecting the commercial viability of wave and tidal power is the ability and cost of bringing the power to the market. Like other types of renewable based generation, wave and tidal power resources are often located a significant distance from load centers and/or existing transmission systems. The construction costs and additional environmental impacts associated with constructing transmission lines to bring wave and tidal power to the grid can be a challenge to the viability of a project.

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