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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A report issued by the National Association of Regulatory Utility Commissioners (NARUC) concludes that continuing oil and natural gas exploration and production moratoria off the U.S. East Coast would likely have significant negative effects on the U.S. economy. The model used in the study predicts, among other things, that by 2030, U.S. crude oil production will decrease by 15% annually, oil imports from OPEC countries will increase 19%, and U.S. gross domestic product will decrease on average 0.52% each year. A copy of the report's executive summary can be found here.
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Tom King, president of National Grid’s U.S. operations, said this week that he does not believe that an electricity transmission grid connecting multiple offshore wind farms is necessary for their development. King noted that offshore projects will be connected to the already-integrated onshore grid along the East Coasts of the United States and Canada. Read more in today’s ClimateWire [subscription required].
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DOI Secretary Ken Salazar and MMS Director Liz Birnbaum announced yesterday that MMS collected more than $157M through aggressive enforcement actions in calendar year 2009. Of this sum, $64M was collected through enforcement activities including audit and compliance programs; more than $34M was collected through automated detection systems, including interest on late payments; and more than $58M was collected through follow-up enforcement actions including civil penalties, negotiated settlements, and other methods to collect royalties. In the announcement, Director Birnbaum stated that MMS intends to "collect every penny that is due to taxpayers" through future enforcement efforts.
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MMS issued a final notice yesterday for Gulf of Mexico Oil and Gas Lease Sale 213 on March 17, 2010, in New Orleans, LA. Nearly 37 million acres will be offered for sale, which MMS estimates could produce approximately 0.8 to 1.3 billion barrels of oil and 3.3 to 5.4 trillion cubic feet of natural gas. The notice also announces the initial lease terms will be reduced as follows: leases in water depths between 1,312 feet to less than 2,625 feet will be 5 years rather than the previous 8-year term, and leases in water depths between 2,625 feet to less than 5,249 feel will be reduced to 7 years form the current 10-year term. Both lease terms could be extended by 3 years if the lessee starts an exploratory well.
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Yesterday the Oregon House of Representatives voted 38-21 on HB 3613, a bill to extend the state’s moratorium on oil and natural gas exploration and production in state waters for 10 years. The Oregonian provides additional details.
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The Los Angeles Times analyzes the political circumstances surrounding exploration and production of oil and natural gas offshore Virginia. The piece notes that a number of elected officials from both major political parties, including Republican Gov. Robert McDonnell and Democratic U.S. Sens. Jim Webb and Mark Warner, support offshore E&P activities. However, NASA and environmental activists have raised concerns with the proposal. Recently, MMS said that it would not issue any oil and natural gas leases for offshore Virginia until 2012.
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President Obama proposed an $8.9 billion FY 2011 budget for the Department of Commerce yesterday. One of the goals of the budget proposal is to fund the President's National Ocean Policy, which includes plans for comprehensive coastal and marine spatial planning and provides for coordination between federal, state, tribal, local and regional entities for efficient management of the oceans. For more information on the Commerce Department's proposed budget, click here.
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President Obama's recently released budget proposes $364.8 million in funding for MMS in fiscal year 2011. This funding package includes $3.5 million to continue development of the agency's Outer Continental Shelf renewable energy program, adding to the $20.4 million appropriated in FY 2010. The budget request also contemplates the phase out and termination of the Royalty-in-Kind program.
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