Washington Window

Federal Agencies Smooth Offshore Energy Process

Jurisdictions for renewable energy projects on Outer Continental Shelf clarified

Designates MMS as principal agency for leasing and siting of offshore wind power

by Dick Farley, capecodtoday Washington Correspondent

WASHINGTON, DC -- April 10, 2009 -- An agreement signed yesterday (April 9, 2009) by top federal regulators should smooth offshore renewable energy leasing and licensing, reducing potential bureaucratic conflicts and uncertainty about agency jurisdictions.

The term "outer Continental Shelf" refers to all submerged lands, its subsoil, and seabed that belong to the United States and are lying seaward and outside of the states' jurisdiction.

Interior Secretary Ken Salazar and Federal Energy Regulatory Commission (FERC) Chairman Jon Wellinghoff signed a Memorandum of Understanding (MOU) clarifying their respective agencies' "jurisdictional responsibilities" for renewable energy projects on the U. S. Outer Continental Shelf.

According to a statement released from Secretary Salazar's office, the MOU "clears the way for developing wind, solar, wave, tidal and ocean current energy sources."

The problem being solved by yesterday's interagency agreement centered on which agency, Interior's Minerals Management Service (MMS) or FERC, has primary jurisdiction over offshore renewable technologies which use the movement of the water itself to generate electricity.

"Clears the way for developing wind, solar, wave, tidal and ocean current energy sources."

So called "hydrokinetic" projects, which use wave action, tidal changes and ocean currents, will fall under FERC jurisdiction, primarily, while "non-hydrokinetic" offshore renewable technologies, such as wind and solar, will have MMS as their lead permitting agency. Yesterday's MOU formalizes what has been the de facto practice of both agencies.

And while the joint federal agency action taken yesterday has no direct impact on the pending Cape Wind offshore wind power project, Cape Wind spokesman Mark Rodgers hailed the progress he said it signals for offshore energy.

"The MOU between MMS and FERC should help provide regulatory certainty and advance the important industry of offshore renewable energy in the United States that will create jobs and promote a cleaner environment and greater energy independence."
    - Mark Rodgers, Cape Wind

"The MOU between MMS and FERC should help provide regulatory certainty and advance the important industry of offshore renewable energy in the United States that will create jobs and promote a cleaner environment and greater energy independence," Rodgers told Cape Cod Today.

Although not applying directly to potential offshore wind power projects, the problem potentially solved by yesterday's agreement between FERC and Interior's MMS involved potential "turf" conflicts involving leasing and permitting of offshore hydrokinetic technologies, an apparent conflict partially resulting from the Energy Policy Act of 2005.

That legislation designated MMS as the principal regulatory agency for leasing and siting of offshore wind power and other technologies using the seabed along the coast and Outer Continental Shelf, extending MMS jurisdiction from their traditional role managing offshore oil and gas leasing and permitting.

FERC, on the other hand, has been the federal agency charged with licensing hydro-power projects, such as electricity generation projects along rivers and in a few tidal areas of the US. The resulting lack of clarity about which agency has primary responsibility for offshore hydrokinetic technology was seen as a potential stumbling block to investors.

"There may have been some hesitancy to pursue certain projects due to the jurisdictional standoff between FERC and MMS."
                  - Nicolette Nye, NOIA

It also introduced an element of confusion if developers staked competing or conflicting claims for a particular site, leading to some fears of possible "claim jumping" as projects lingered in a bureaucratic "limbo" caused by real or perceived jurisdictional conflicts, various analysts have said.

As a result of yesterday's agreement, each agency has an option to collaborate on siting and licensing should administrators so choose, with the MOU spelling out which agency will have primary responsibilities for different technologies, avoiding duplicative processes while shortening development times for offshore renewable projects.

The National Ocean Industries Association, member industries of which encompass offshore renewable firms as well as more traditional oil and gas recovery companies, weighed in as supportive of the FERC/MMS agreement.

"There may have been some hesitancy to pursue certain projects due to the jurisdictional standoff between FERC and MMS," NOIA spokeswoman Nicolette Nye told Cape Cod Today.

"But this MOU certainly provides jurisdictional clarity for companies interested in pursuing offsore wave, tidal and ocean current technologies," Nye said.

Nicolette Nye may be a familiar name to followers of the Cape Wind permit consideration process, as Nye previously was spokeswoman for the Interior Department's MMS program establishing rules for the offshore renewables program. Nye joined the National Ocean Industries Association as its Director of Public Affairs about one year ago, she said.

• See the MMS description of Outer Continental Shelf.
• Link to Memorandum of Understanding (MOU).
• Link to Ocean Renewable Energy Coalition website, which has an analysis of the FERC/MMS Memorandum of Understanding.
• Link to the National Ocean Industries Association.
• Link to the Dept. of Interior release of April 9, 2001.