Opportunities Abound
for Offshore Alternative Energy Development
By Joan M. Bondareff
When more than 300 participants from all sectors of the economy and government attend a conference on Renewable Energy from the Ocean in April, as they recently did in New York City, then something is clearly happening to attract their interest. As one of the keynote speakers at the conference, Senator Lisa Murkowski (RAlaska), said, "[ocean energy] has arrived in the big leagues." This article provides a brief overview of what the legislative, legal, financial, and permitting picture looks like in the United States when it comes to developing marine ocean resources, called "hydrokinetics". Hydrokinetics includes the use of ocean (or river) winds, waves, tides, and currents to create energy. The good news about these renewable sources of energy is that they leave no carbon footprint and therefore can help the U.S. reduce carbon emissions. Some experts estimate that up to 10 or even 20 percent of our energy can come from the ocean.1
lished a Record of Decision approving the final PEIS. MMS was also directed by the Act to issue regulations governing ocean energy development on the OCS. To date, those regulations have not been issued, but proposed rules are expected shortly. MMS hopes to issue final regulations by the end of 2008. In the meantime, to expedite development of alternative energy, MMS has announced a policy of awarding interim leases to companies who want to collect data and test technology on wind, wave and ocean currents. These leases will be authorized on five designated areas of the OCS offshore New Jersey, Delaware, Georgia, Florida, and Northern California.2 MMS received over 40 nominations for test leases and plans to approve about sixteen of them. Jurisdiction of the MMS is largely confined to the OCS, although it and the Federal Energy Regulatory Commission (FERC) share jurisdiction for alternative energy development between three and twelve miles.
Legislative Framework for Ocean Energy Resource Development:
MMS and the Outer Continental Shelf Section 388 of the Energy Policy Act of 2005 (Act) authorized the Minerals Management Service (MMS) to act as the lead agency for Federal offshore alternative energy and alternate uses of America's offshore public lands, and to grant easements, leases, or rights-of-way for alternative energy uses of the Federal Outer Continental Shelf (OCS). The Act also designates that coastal States will share in 27% of the revenues generated from alternative energy activities within three nautical miles seaward of a State's submerged lands. In 2007, the MMS produced a Programmatic Environmental Impact Statement (PEIS) outlining the environmental impacts of developing renewable energy resources from the OCS, and on January 10, 2008, pub36 MTR
FERC Licensing and Permitting on Inland Rivers and Coastal Waters
FERC, a regulatory agency within the Department of Energy (DoE), has jurisdiction under the Federal Power Act to issue licenses for construction, operation, and maintenance of hydropower projects.3 To encourage and facilitate the development of power from waves, tides, and ocean currents, FERC created a new licensing program for renewable ocean energy production. Under this program, FERC instituted three types of permits to authorize companies to develop hydroenergy and connect it to the electric power grid. These permits consist of: (1) pilot project licenses; (2) preliminary permits; and (3) regular licenses. The various types of activities authorized under each permit are described in detail in a White Paper issued by FERC in 2007, and recently updated.4 In December, 2007, FERC issued its first license for a hydrokinetic energy project located in the Pacific Ocean
June 2008
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