Federal Shift Bodes Well for U.S. Offshore Wind Power

A main opposition point for foes of offshore wind power in the U.S. has been dampened considerably through a recent change of the government agency in charge of regulation and permitting.

Plenty of attention has been given to the various tax credits for renewable energy in the recently passed Energy Policy Act of 2005. A lesser-known item was a stipulation by Congress that the Minerals Management Service (MMS) take over as the lead Federal authority for offshore renewable energy projects, such as wave and wind power. Under this new authority, MMS becomes the lead Federal agency for permitting and regulatory oversight of the two projects that were already submitted to the U.S. Army Corps of Engineers: the 420 MW Cape Wind project off Cape Cod, Massachusetts, and the 140 MW Long Island Power Authority (LIPA) project off Long Island, New York. Since the announcement in 2001 of the Cape Wind project — the first such project in the U.S. – the Corps was designated as the lead regulatory agency. This centered on the Corps’ control over navigable waterways via the Rivers and Harbors Act (RHA). Critics, though, regularly characterized the RHA as an antiquated and inappropriate legal justification to place the Corps in the position as lead regulatory agency for offshore wind farms. The Alliance to Protect Nantucket Sound, a group fervently fighting the Cape Wind project, tested its arguments in Federal Court last fall by trying to prevent Cape Wind from erecting a meteorological test tower. “The Corps does not have jurisdiction over Cape Wind’s proposed development,” said a statement on the organization’s Web site. “The RHA does not apply beyond the three-mile state territorial limits, where Cape Wind seeks to develop. The Corps claims that the RHA applies to Cape Wind’s proposed site by virtue of the Outer Continental Shelf Lands Act (OCSLA). However, the OCSLA regulates gas, oil, and mineral development only. It has absolutely no application to offshore wind plants. The Corps, by processing this permit, has exceeded its Congressional authority.” Not only did the Federal Courts rule in favor of the Corps last fall, but this latest shift in regulatory oversight to the MMS clearly legitimizes by the Congress a regulatory agency for wind power that has a long history of permitting and regulating offshore energy use. “This has removed the primary legal argument that the opposition would have used to challenge the permit,” said Mark Rodgers, spokesman for Cape Wind. “This takes away rhetorical flourishes about a private takeover of public space not authorized by Congress. Congress now has dealt with this issue in a clear manner, in a bill signed by the President, that gives the industry a clear message that’s useful at this stage to really grow. This has to be seen as a very positive development for the emerging industry of offshore wind in the U.S.” The Corps will remain a key part of the wind farm’s ongoing environmental review and will still play a large role in permitting but Rodgers says it’s only logical to have MMS, with all its experience permitting and regulating offshore extractive activities, as the lead agency. This sentiment is echoed over at MMS as well by its spokesman, Gary Strasburg. “We are the agency responsible for the energy in the outer continental shelf so it only seems right that we’re the lead agency,” Strasburg said. “This has put the ball in the place where it needs to be and in light of what has happened with the hurricanes, we need to move forward to get renewable energy moving ahead.” This is not a brand new step for MMS either. The agency has been among the 16 governmental groups involved in studying Cape Wind’s proposal since 2001. Through the energy bill, Congress directed MMS to establish, by mid-May of next year, specific regulations and guidelines under its new authority. Among these will be payment and lease structures for wind. Congress stipulated that coastal states within 15 miles of a project would share in 27 percent of the revenues generated from lease payments to be structured by MMS. MMS currently raises considerable funds from lease payments from offshore oil and gas projects. By mid-February, MMS will establish a formula that’s specific for wind power. Since wind power isn’t an extractive industry, Strasburg said there would have to be a different metric applied to wind projects. He could not give any indication of what Cape Wind, for example, might add to Massachusetts coffers. Whatever the number, Seth Kaplan, Senior Attorney and Director of the Clean Energy and Climate Change Program at the Conservation law foundation, doesn’t expect the payments will temper anti-wind sentiments among some state government critics. Governor Mitt Romney and the influential U.S. Senator Ted Kennedy have been outspoken opponents of the project. “The opponents are still the opponents and supporters are still the supporters,” Kaplan said. A separate item, however, may stand a better chance at appeasing some critics, says Kaplan. There’s an important distinction between the Corps and MMS as lead agencies. The Corps typically doles out yes or no answers to permitting requests but doesn’t deal actively with ongoing operating conditions. The MSS, through its experience with offshore energy and extractive industries, actively manages and regulates industry. This is relevant to wind power because there could be issues like a sudden and unexpectedly high number of bird kills — a concern that has come up in many forms. The draft environmental impact statement on the Cape Wind project said this was not likely to be an issue, but should it come up, Kaplan says the MMS is in a better position to actively deal with the situation and take whatever actions would be needed, such as ordering the shutting down of the turbines. The longer-term vision for wind power under the MMS is likely to involve the agency coming up with regional plans where they open up development on a block by block basis after having researched, consulted and determined some of the best locations for wind. Kaplan says the future process at MMS is not likely to be a highest-bidder type situation as is often the case with oil and gas but rather a merit-based approach where the developers most likely to fulfill the project would get the go-ahead. Ultimately, MMS could embody a role similar to Britain’s Crown Estate, which has effectively been turned into a one-stop shop for applications for offshore wind farm development in the UK. It’s impossible to tell, but MMS might just turn out to be better suited than the Corps at making Cape Wind and other wind projects a reality. “MMS, for better or worse, has a long history of getting things built,” Kaplan said. The MMS recently launched a new Web site explaining its new role governing renewable energy and alternative uses of the outer continental shelf. See the link below for more information.
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