Several Senators voiced concerns about the amount of time it may take to secure regulatory approval for offshore energy development at a Senate Appropriations Subcommittee hearing on the FY2011 budget request for the Department of the Interior on March 9. Senator Collins was among them, expressing particular concern that MMS may require several environmental impact statements to obtain a lease on federal offshore lands. Secretary of the Interior Ken Salazar tried to allay fears and explained that a group within the Department of the Interior has been assigned the task of developing a streamlined permitting process. Salazar added that "it's absolutely unacceptable that any government process like this should take three to nine years." A webcast of the hearing is available here.
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The California Legislative Analyst's Office (LAO), a non-partisan fiscal policy advisory team to state officials, argues in a new report that the California legislature should approve oil and gas drilling in the state's offshore lands. The proposal, known as Tranquillon Ridge, would permit drilling in state waters via a production platform located in federal water off the Santa Barbara coast. LAO's report suggests that production royalties from Tranquillon Ridge would help the state close its current budget gap.
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Yesterday Gov. Bob McDonnell (R-VA) signed two pieces of legislation dealing with offshore energy programs. The legislation would permit exploration for oil and natural gas in certain areas at least 50 miles off the Virginia coast and would direct any royalties from energy production to the state's transportation budget and a renewable energy research consortium. The Associated Press offers further coverage.
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The Department of Energy (DOE) announced yesterday that it intends to issue a Funding Opportunity Announcement (FOA) to facilitate the development of marine and hydrokinetic technology. The "Marine and Hydrokinetic Technology Readiness Advancement Initiative" will competitively award funds to develop technologies that generate renewable electricity from waves, currents, tides, rivers, and the ocean's thermal energy. DOE anticipates the FOA will be posted no later than March 31, 2010.
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The Department of Energy (DOE) published notice yesterday that Reedsport OPT Wave Park, LLC has filed a hydroelectric application for the Reesdsport OPT Wave Park Project. The application proposes construction of ten wave-powered generating units to be anchored about 2.5 miles off the coast of Douglas County, Oregon, spanning about a quarter of a square mile. The buoys will be linked to a single Underwater Substation Pod, which will be connected to the Douglas Electric Cooperative transmission line. The application is available for public comment, and DOE is preparing to commence the next steps of review.
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The House Democratic Caucus on March 9 announced Rep. Jim Moran (D-VA) as the new chairman of the Interior Appropriations Subcommittee, which has jurisdiction over EPA and Interior, among other federal agencies. In this role, Rep. Moran will oversee the fiscal 2011 Interior and Environmental bill.
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The U.S. Minerals Management Service (MMS) announced in today’s Federal Register that its Environmental Assessment (EA) for the Cape Wind project is now available. The announcement also states that the EA includes a draft Finding of No New Significant Impact of information MMS received following its issuance of the Final Environmental Impact Statement earlier this year.
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Sen. Lisa Murkowski (R-AK), ranking member of the Energy and Natural Resources Committee, has prepared a discussion draft of a bill that would extend drilling in the eastern Gulf of Mexico, authorize drilling in the Arctic National Wildlife Refuge, establish royalty revenue sharing with coastal states that permit offshore drilling, and streamline offshore environmental review and permitting procedures. Sen. Murkowski believes that the expansion of domestic drilling should accompany any new climate legislation Congress considers.
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Sen. Tom Carper (D-DE), along with Sens. Olympia Snowe (R-ME), Sherrod Brown (D-OH), and Susan Collins (R-ME), introduced a bill yesterday to provide financial incentives for the investment, development and production of offshore wind. Among other things, the Carper-Snowe-Brown-Collins offshore wind bill would extend the production tax credit (PTC) for offshore wind farms until 2020. The sponsoring Senators are also working on additional legislation to support and expand offshore wind initiatives.
In other wind power related news on Capitol Hill, Sen. Chuck Schumer (D-NY) and others introduced a bill which would require all projects funded by stimulus package dollars to rely solely on American-built products. The Senators also sent a letter to Treasury Secretary Tim Geithner pushing for a moratorium on all stimulus payouts for clean energy projects until Congress considers the bill. Under the current stimulus law, the "Buy American" provision - which requires that a project rely primarily on American-built products - applies only to "public works." The Schumer bill would extend the Buy American requirement to all renewable energy projects, including every wind farm that is being or proposed to be built with stimulus assistance. Denise Bode, the CEO of the American Wind Energy Association (AWEA) issued a sharply-worded response to the bill, arguing that it would "torpedo one of the most successful job creation efforts" of the stimulus, in part because American manufacturers do not yet have the capacity to produce 100% of the required wind turbine components.
Today, Matt Rogers, a senior advisor to Energy Secretary Steven Chu, testified before the Senate Energy and Natural Resources Committee and strongly challenged Senator Schumer's characterization of DOE's use of stimulus dollars. He expressed the view that the senators' proposed legislation would actually eliminate American jobs. He challenged the study underlying the proposed legislation as "misleading" and "factually false" because it only focused on the overseas headquarters of companies and failed to specifically account for actual job creation in the United States.
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During testimony before the Senate Energy and Natural Resources Committee, Interior Secretary Ken Salazar said that he hopes to release the revised 2007-2012 5-Year OCS Plan, as ordered by the D.C. Circuit Court of Appeals, later this month, as well as the next 5-Year Plan, which would run from 2012-1017. The Houston Chronicle provides further coverage.
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Florida State Senator Mike Haridopolos (R) introduced SB 2622 late last week, a bill that would charge energy companies $1 million to explore for oil and gas in state waters off the northwestern coast of Florida. Several state senators objected to the legislation and suggested that offshore E&P in this area could affect U.S. military training operations. According to the News Herald (Panama City, FL), this bill is identical to one proposed last year.
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The Boston Herald reports that U.S. Secretary of the Interior Ken Salazar has determined that Cape Wind and two Massachusetts Indian tribes opposed to the project have failed to reach a compromise. Secretary Salazar has referred the project to the Advisory Council on Historic Preservation, which will now begin 45-day comment period on the Cape Wind project.
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The Associated Press (via Business Week) reports that two companies have filed applications with MMS under its relatively new offshore renewable energy program to lease federal lands in order to study the prospects for and potentially build wind farms offshore Virginia. Apex Wind Energy is seeking to lease 116,000 acres of submerged lands offshore Virginia to build a wind farm that could generate up to 1,500 megawatts of electricity. Seawind Renewable Energy has applied to install 240 wind turbines on a tract of submerged lands off the Virginia coast. An official with Seawind cited Virginia's manufacturing base as a positive factor for locating the company's wind farm off the state's coast, saying "there is a lot of heavy manufacturing involved in offshore wind and the Hampton Roads region is set up for that manufacturing and to take a big part of that."
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The Interior Department on February 25 notified the D.C. Circuit Court of Appeals that it would miss its self-imposed February 26 deadline to complete its internal review of a draft environmental sensitivity analysis of areas of the OCS, and an internal review of the balancing and exclusion determinations contained in the 2007-2012 Five Year Program. Interior is conducting these reviews pursuant to court order. It expects to complete them by March 29.
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On Monday, the Virginia Senate passed HB 756, a bill that apportions future state revenues gained from offshore oil and natural gas leases. The bill mandates that 70% of any state revenues from offshore E&P must go to Virginia’s Transportation Trust Fund, 20% to the Virginia Coastal Energy Research Consortium, and 10% for local improvements to infrastructure and transportation. The Virginia House of Representatives passed HB 756 earlier this month. Virginia's new governor, Bob McDonnell, has expressed support for offshore oil and gas E&P.
On Tuesday National Ocean Industries Association President Tom Fry released a statement commending the Virginia Senate’s support for future offshore energy development. In his statement, Fry said that the vote “demonstrates a strong bipartisan commitment by the Commonwealth to allow OCS exploration off its coast and actively work with Congress and the Obama Administration to move forward with OCS Lease Sale 220.” Fry went on to note that offshore leases in Virginia could offer “new jobs, new federal and state revenue, and new energy for America.”
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The Department of Energy recently released its Report to Congress on Potential Environmental Effects of Marine and Hydrokinetic Energy Technologies. The Energy Independences and Security Act of 2007 required DOE to prepare the Report in consultation with the National Oceanic and Atmospheric Administration. The Report focuses on the potential effects of marine and hydrokinetic technologies on various aspects of the nation's aquatic environments and finds no conclusive evidence that marine and hydrokinetic technologies will cause significant environmental effects and highlights areas where further information and research is needed.
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Clean Skies TV provides coverage of a press conference given by Interior Secretary Ken Salazar and the governors from certain Atlantic coast states following their February 19 meeting to discuss offshore wind power development in the Atlantic Ocean. Salazar emphasized the need for a streamlined regulatory process and announced that he has instructed his department and the MMS to "take a look at how we are now doing it on the onshore and to compare that to what we are doing on the offshore to see how we might be able to borrow the lessons that we've learned from the onshore." Noting the significant renewable energy development onshore in the U.S., Salazar stressed that "we need to have the same kind of acceleration with respect to the offshore." Participating Atlantic states include Maine, Maryland, Delaware, Rhode Island, Virginia and Massachusetts. Additional coverage can be found here and here.
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Platts Inside Energy Extra [subscription required] reports that U.S. Secretary of the Interior Ken Salazar will meet with the governors of Delaware, Maine, Massachusetts, Maryland, Rhode Island and Virginia today to discuss offshore wind power projects. Platts notes that all six governors have previously expressed support for wind projects off their respective coasts and today's meeting will focus on the project siting and permitting process. In addition, the Virginian-Pilot (Hampton Roads, VA) provides further coverage of Virginia's efforts to develop offshore wind projects in advance of today's meeting.
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Yesterday the Oregon Senate voted 22-8 to extend a moratorium on offshore exploration and production in the state’s coastal waters. The measure, HB 3613, was passed by the Oregon House of Representatives last week and extends the moratorium for ten years. According to the Los Angeles Times, Gov. Ted Kulongoski (D-OR) has said that he supports extending the moratorium.
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