Interior Issues Final Rules for Offshore Renewable Energy Projects

By Published On: April 24, 2009

In a move expected to boost the prospects for renewable power, President Barack Obama announced April 22 that his Interior Department was issuing final regulations to establish a framework for offshore development of wind, wave, and other forms of green energy. While the immediate effect of the move may be to advance offshore wind project proposals along the Northeast states, the rules come after the Interior Department released a report showing substantial wave energy power off California. The report cited the potential for wind power too, though much of that resource lies in water considered too deep to be developed at this time (Circuit, April 10, 2009). Obama said he wants “to achieve a comprehensive energy and climate policy, one that will lessen our dependence on foreign oil, make the U.S. the global leader in clean energy technology, and prevent the worst impacts of climate change.” Interior secretary Ken Salazar characterized the regulations as a “bold step toward opening America’s oceans and new energy frontier, so that we can wisely build a clean energy economy.” Under the rules, the Federal Energy Regulatory Commission has exclusive jurisdiction over permits for hydrokinetic resources, like wave and tidal power. However, hydrokinetic resource developers first have to lease ocean area from the Interior Department’s Minerals Management Service. Developers of other forms of offshore renewable energy, such as wind power, also have to obtain leases from the MMS and then obtain project permits from the service. MMS plans to lease some areas on a competitive basis, but also can make non-competitive leases for specific projects if no competitive proposals are received. Annual lease fees are $3/acre during development and $5/acre once projects are completed. Acquisition costs for competitive leases will be the bid price. In non-competitive leases acquisition costs are 25 cents/acre. To get a permit, non-hydrokinetic renewable energy project developers first need to seek MMS approval of a site development plan under the rules. After that they have to get MMS to okay a more specific construction and operation plan. American Wind Energy Association chief executive officer Denise Bode heralded the rules as “a welcome step.” Deepwater Wind managing partner Chris Wissemann called it “fantastic news.” Deepwater has projects planned along the Northeast coast.

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