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Governor-elect Bob McDonnell (R-VA) wrote to U.S. Secretary of the Interior Ken Salazar this week outlining his incoming administration's views on offshore oil and natural gas production. In his letter, the governor-elect requested that the oil and gas lease auction planned for 2011 be held as scheduled and not be subject to additional delay. Platts Gas Daily [subscription required] offers additional coverage.

Platts Inside Energy Extra [subscription required] reports that the congressional delegation from Massachusetts has requested that MMS place its new regional office for renewable energy along the Atlantic seaboard in Massachusetts.  Secretary of the Interior Ken Salazar announced the creation of this office earlier this month, but a site for the office has not yet been selected.

MMS announced yesterday that it will collect new fees ranging from $2,000 - $6,000 per facility to recover the costs of offshore inspections, including safety and environmental inspections of offshore facilities and associated equipment.  The fees will apply to inspections conduced on all bottom-founded structures and floating production facilities on the OCS in the Gulf of Mexico during FY 2010.  Authority for these new fees comes from legislation signed into law by President Obama on Oct. 30, 2009, directing MMS to collect $10M for safety and compliance inspections in the Gulf of Mexico and certain areas offshore California.

Canadian Superior Energy announced this morning that it intends to file federal and state applications for its Liberty LNG deepwater port proposed for offshore New Jersey in the third quarter of 2010.

A spokesperson for New Jersey Governor-elect Chris Christie (R) told the Queens Courier that the governor-elect remains opposed to the Safe Harbor Energy LNG deepwater port proposal off the coasts of New Jersey and New York due to concerns regarding the project's impacts on the state's coastal economy.

Yesterday, environmental and Alaska Native groups filed a petition for review in the Ninth Circuit Court of Appeals of MMS's approval of Shell Offshore's plans to drill two exploration wells in Alaska's Beaufort Sea.  The groups argue that MMS failed to ensure that the drilling of these wells could occur safely and failed to adequately evaluate the impacts on marine mammals.  Before exploratory drilling takes place, Shell must obtain an Application for Permit to Drill from MMS, and its plans must be consistent with the Alaska Coastal Zone Management Program, as well as various air and water quality rules.  The petitioners' brief is due March 5, 2010.  The case is Native Village of Point Hope v. Salazar, No. 09-73942.

Today the White House Council on Environmental Quality released an Interim Framework for Effective Coastal and Marine Spatial Planning ("Framework").  The Framework was developed by the Interagency Ocean Policy Task Force, which is composed of twenty-four senior officials from administrative agencies, departments, and offices, and is led by White House Council on Environmental Quality Chair Nancy Sutley.  It was developed pursuant to one of the nine priority objectives proposed earlier this year in the Task Force's Interim Report.  While the Framework does not purport to establish actual marine planning zones, it does establish a process for federal agencies to work with state and local governments to develop and implement coastal and marine spatial plans over the next five years.  
 
In a press release announcing the Framework, Sutley stated, "The uses of our oceans, coasts and Great Lakes have expanded exponentially over time...Without an improved, more thoughtful approach, we risk an increase in user conflicts and the potential loss of critical economic, ecosystem, social, and cultural benefits for present and future generations."

Senators Mark Begich (D-AK) and Olympia Snowe (R-ME) introduced a bill yesterday to establish a comprehensive ocean, coastal, Great Lakes, and atmospheric research, prediction, and environmental information program within NOAA to support renewable energy.  The bill, titled the Renewable Energy Environmental Research Act of 2009, would require the Administrator of NOAA to develop a renewable energy research plan that would include a coordinated weather, water, and climate prediction component focused on renewable energy, such as offshore wind and tidal energy, to provide information and decision services to support the development of these energy sources.  The proposed Act also focuses on avoidance, minimization, and mitigation strategies to address potential impacts of offshore renewable energy projects on the marine and coastal environment.

Last week the Long Island-New York City Offshore Wind Collaborative, comprised of a number of state and local agencies and public utilities, announced that it plans to accept proposals to develop a 350 MW wind farm, with potential to expand to 700 MW, planned for 13 miles offshore Long Island.  30 wind developers already responded to a request for information released in July.  Project participant Long Island Power Authority's press release provides additional information.

A DOE source told Energy Washington (subscription required) that the agency plans to sign a memorandum of understanding (MOU) with the MMS in the next two months to begin developing a streamlined permitting process for hydrokinetic power projects, including those on the OCS.  DOE reports that the MOU will broadly cover offshore renewable energy and outline a framework for collaborating on environmental assessments and streamlining the permitting process.  In addition, DOE plans to organize a series of meetings with the FERC, NOAA, the Department of Defense, and other federal agencies.  Reports of the DOE/MMS MOU follow on the heels of the House Committee on Science and Technology hearing on hydrokinetic energy earlier this month.

During a tour of a wind farm near the U.N. climate summit in Copenhagen, Interior Secretary Ken Salazar announced today that the MMS will establish a new regional office to oversee offshore renewable energy project development off the Atlantic seaboard.  Salazar noted "the enormous potential for renewable energy development, especially wind energy, in the Mid- and North Atlantic."  The new office will implement and manage MMS's growing offshore renewable energy portfolio, including leasing and environmental programs.  Read DOI's press release for more information.

On December 8, 2009, a Senate Energy and Natural Resources subcommittee considered H.R. 3165, a bill that would provide $200 million over five years to the Department of Energy's wind energy research program.  The proposed goals of the research program are to improve the energy efficiency, reliability, and capacity of wind turbines; optimize the design and adaptability of wind energy systems; and reduce the cost of construction, generation, and maintenance of wind energy systems.  One of the stated focuses of the program is the development of wind technology for offshore applications.

On December 8, MMS held its first task force meeting with Virginia officials to discuss renewable energy development on the OCS.  The meeting is part of an MMS inter-governmental task force that includes local, state, tribal, and federal stakeholders.  The task force will work to facilitate the commercial leasing process for OCS renewable energy evelopment offshore Virginia.  At the meeting, members discussed options for starting Virginia's offshore leasing program, as well as specific actions and timelines to support Virginia's goal of developing offshore renewable energy.  "The MMS Virginia Task Force will provide a forum for efficient review of proposed renewable energy projects on the OCS to move toward the goal of expanding our nation’s energy resource portfolio in an environmentally sound manner, while being responsive to the needs of affected States, localities, and tribes," said MMS Director Liz Birnbaum.  MMS has already held similar meetings with Massachusetts and Rhode Island.

Maryland officials recently announced the state is signing long-term contracts to purchase electricity from wind and solar projects in the region, including from the Bluewater Wind project offshore Delaware. The Director of the Maryland Energy Administration, Malcolm Woolf, said the contracts will cover 23 percent of the state's electricity needs, and will help the state obtain its goal of reducing its carbon footprint by 25 percent by 2020.  Woolf anticipates the state will buy up to 55 MW from the Bluewater Wind project, and a combined total of 78.5 MW from three other projects.

On December 7, MMS approved Shell Gulf of Mexico, Inc.'s Exploratory Plan to drill three exploratory, information-gathering wells in the Chukchi Sea off the northwest coast of Alaska.  Shell's subsidiary paid $2.1 million for the leases during the Chukchi Sea Oil and Gas Lease Sale 193.  This 2008 sale was part of the Bush Administration's 2007-2012 Five-Year OCS Oil and Gas Leasing Program.  Under the Exploration Plan, Shell will be allowed to drill up to three exploration wells during the July-October open water drilling season.  The closest drill site is over 60 miles offshore Alaska.

DOI Secretary Ken Salazar commented, "our approval of Shell’s plan is conditioned on close monitoring of Shell’s activities to ensure that they are conducted in a safe and environmentally responsible manner."  He added,  “these wells will allow the Department to develop additional information and to evaluate the feasibility of future development in the Chukchi Sea."

Nine European nations have signed the North Seas Countries Offshore Grid Initiative, agreeing to examine the construction of an offshore wind energy grid, dubbed a "Supergrid," in the North and North West Seas.  The Supergrid would bring to European market electric power generated by North Sea and Baltic Sea wind farms, and would help the EU achieve its objective of 20% of its power generation from renewable energy sources by the year 2020. The initiative plans on preparing a strategic work plan and agreeing on a memorandum of understanding in 2010, each with input from regional stakeholders.  The countries who have signed the initiative are the United Kingdom, Denmark, Germany, France, Belgium, the Netherlands, Luxembourg, Sweden and Ireland.  The New York Times provides further coverage.

The Massachusetts Renewable Energy Trust commissioned a report prepared by Analysis Group, Inc., that examines a number of financing strategies for transmission systems that will be necessary to transport electricity from offshore energy projects, particularly wind.  The report discusses financing options ranging from passing costs of transmission through to end users of the electricity to publicly financing an interstate underwater transmission system.

The House Committee on Science and Technology, Energy and Environment Subcommittee held a hearing Nov. 3 to discuss the role of the federal government and industry in the development of hydrokinetic energy generation.  Chairman Brian Baird (D-WA) noted that studies indicate approximately 10% of U.S. electricity demand could be met by hydrokinetic energy sources.  Currently, DOE reports that there is only one commercial hydrokinetic project operating in the U.S. (in the Mississippi River).  Congress first authorized funding for significant hydrokinetic technology research in the Energy Independence and Security Act of 2007, but DOE’s hydrokinetic R&D portfolio remains modest.  This hearing indicates that interest in these projects is growing.  Additionally, key agencies such as DOE, FERC, and DOI are considering forming a working group to speed up the regulatory process for permitting in the near future.

Speaking to approximately 700 attendees at the American Wind Energy Association's Offshore Wind Power Workshop in Boston, Rhode Island Governor Donald Carcieri (R) highlighted his State's support for developing offshore wind power resources, noting that all states should be working together "to find common ground to foster regional solutions" for promoting wind power development and energy independence.  Calling development of offshore wind resources a "smart economic strategy," Gov. Carcieri modified a well-known refrain and said his State's motto now is "spin baby, spin."

Governor Deval Patrick (D-MA) is expected to announce today that Cape Wind and the utility National Grid have signed a memorandum of understanding to negotiate a long-term power purchase agreement under which National Grid would purchase electricity produced by the wind turbines at the Cape Wind project.  The Boston Globe reports that this agreement will play an important role in securing financing for the construction of the wind farm.

On December 1, 2009, Massachusetts and U.S. officials celebrated the groundbreaking of the nation's first facility capable of testing wind turbine blades up to 90 meters long.  It is anticipated that research into longer blades will stimulate the creation of large-scale offshore wind power facilities in the United States.  Rep. Bill Delahunt (D-MA) noted that the "test center is critical if we are to effectively compete with European companies that are developing advanced offshore wind energy technology in deeper water, away from shipping lanes and fishing grounds, using larger turbines and blades." 
 
The test center will be operated jointly by the DOE's National Renewable Energy Laboratory and the Massachusetts Clean Energy Center.  The $40 million facility is supported by $25 million in funds from the American Recovery and Reinvestment Act.

On December 1, the New York Power Authority ("Power Authority") issued a Request for Proposals ("RFP") for the development of offshore wind power projects in New York State waters in Lake Erie and/or Lake Ontario, potentially leading to the first wind power development of any kind in a fresh water body in the U.S.  The RFP seeks proposals for development of a utility scale project in the range of 120 MW to 500 MW.  The Power Authority stated that it prefers projects that will benefit the New York economy and commence commercial operations in 2015.  The due date for an optional notice of intent is March 20, 2010, and the due date for proposals is June 1, 2010.  Any winning proposals are expected to be awarded by December 2010.  Notably, the Power Authority will purchase the full output of any project under a long-term Power Purchase Agreement, which is scheduled to be negotiated by May 31, 2011.

A copy of the RFP is available here.